Once they become more confident, first-time home buyers will return to the housing market.
That's according to Patrick Stone, CEO of the Williston Financial Group, a national company that owns WFG National Title Insurance Co., a provider of services to banks and credit unions.
Stone argued pessimists who have said large numbers of Americans have turned away from home ownership were incorrect, he told attendees at Williston's Executive Management Conference in October.
He countered that polls showed no difference in attitude towards owning homes but too many consumers doubt their abilities to qualify for mortgage loans.
Stone distinguished between consumer confidence, which measures near-term views, from consumer sentiment, which reflects long-term expectations.
Confidence plummeted during 2008 and 2009 as the Great Recession hit its stride and the shorter-term measure dropped 35% below the longer-term consumer sentiment number, according to Stone.
"The economy will grow by at least 3.5% annually over the next five quarters," he predicted. "Consumer confidence will blow past the 95 mark (it hit 95.4 in October – its highest level in seven years); first-time buyers will return to the market in force, and as they do, home sales will increase from a slow walk to "a sprint."
His biggest prediction involved demographics.
Baby boomers are no longer the largest age group, Stone said at the conference.
It is 22-year-olds who now hold that title. There will be more than 4.6 million heads of household in their prime household formation years between the ages of 26 and 36 by the year 2020, he noted.
That growth will fuel another real estate boom, which Stone said makes him very optimistic about the outlook.
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