SEATTLE--(BUSINESS WIRE)--Vontive, the first embedded mortgage platform for investment real estate, today announced the release of its inaugural U.S. Housing and Economy survey. This is the first public survey of its kind, comparing the views of real estate investors to those of consumer households. Vontive’s data shines a light on how these actively engaged audiences view the market. Vontive will update its survey each quarter (October, January, April and July) to track how sentiments change.
“We made an investment in quality data, monitoring the health of the U.S. housing market and outlook for the economy, based on solid underlying research in order to spark useful conversations, debates and insights,” said Charles McKinney, CEO and co-founder of Vontive. “Real estate investors, homeowners, lenders, and financial institutions deserve access to such information to drive their decisions.”
Key Findings on the Real Estate Market:
- Real estate investors believe home values have transitioned from appreciation to decline, and the housing market will weaken over the next 12 months. In contrast, a majority of households believe the housing market is neutral or strong today and will remain there in 12 months.
- Real estate investors expect home values will decline 7% over the next year. While pessimistic, their expectations are not nearly as severe as the 2008 U.S. Housing Crisis when home values contracted approximately 30%. Consumers believe home values will appreciate 8% over the next year.
- Both real estate investors and consumers believe rents will appreciate over the next year (3% according to real estate investors and 8% according to consumers). Whereas consumers believe rents will continue a trend of appreciating, real estate investors expect rents will stabilize over the next year.
- A plurality of real estate investors and consumers believe now is a bad time to purchase property, but that conditions will improve looking out 12 months.
- In terms of securing a mortgage, real estate investors see it as becoming more difficult, particularly as credit tightens over the next year. Consumers don’t see much of a change, but they are unsure of how easy or difficult it may be to secure a mortgage.
Key Findings on the Broader Economy:
- Real estate investors and consumers are pessimistic about the economy. Both believe the economy is in a recession today, and a transition back is not expected until two years from today. Interestingly, 53% of consumers believe the economy was in a recession 12 months ago.
- In terms of inflation, both real estate investors and households believe it is accelerating. On average, real estate investors and consumers believe the inflation rate will be 7.39% and 9.35% in one year, respectively. To the right of the median, consumers expect inflation will be much higher in a year.
- Real estate investors believe the unemployment rate will be 5.61% a year from now. Consumers believe the unemployment rate will be 5.74%, modestly more pessimistic on average. At the 90th percentile, reflecting the most pessimistic view of our survey panels, real-estate investors believe unemployment will rise to 8% and consumers to 10%.
“Our survey tells a complicated story. To differing degrees, real estate investors and consumers believe the economy is recessionary, inflation is accelerating, and home prices have already transitioned from appreciating to declining,” noted McKinney. “While the survey does not provide clear-cut answers about the housing market or roadmap for real estate investors, it does reinforce our belief in financing investments that add value to properties and create rental affordable housing. If prices fall and rents appreciate, real estate investors who acquire and improve those assets will profit. We encourage lenders and financial institutions to use the survey in thinking through being long home values and their macro risk exposure. Some of the data points may help define stress scenarios for loss exposure.”
The timing of the initial survey, which was conducted September 18-24, 2022, overlapped with the Federal Reserve announcement of a 75-basis point interest rate hike. Due to timing and large sample size (1,052 real estate investors and 1,151 consumer households), Vontive uniquely has been able to measure how a crucial monetary policy change may have influenced each panel’s responses.
This survey is part of Vontive’s investment in data science and research to monitor the health of the U.S. housing market and outlook for the economy. Each panel received the same questions to enable their views to be compared. The real-estate investor panel provides very significant coverage of non-institutional real estate investors. The consumer panel is nationally representative of households with a ±4% margin of error.
The complete survey results can be found here.
About Vontive
Founded by credit industry and technology veterans, Vontive has created the first embedded mortgage platform for investment real estate. In doing so, it enables any bank, credit union, property technology company, or B2C brand serving real estate investors to launch its own investment-mortgage business with ease. Please visit https://www.vontive.com or follow us at linkedin.com/company/vontive.
