Existing-homes sales have dropped in four of the past five months, but the Realtors think the slowdown is not because of a lack of confidence from consumers about buying and selling a home--or based on their views about the direction of the economy and their finances.

That assessment is based on NAR’s third quarter Housing Opportunities and Market Experience (HOME) survey, which also found that two-thirds of households think saving for a down payment is challenging, and roughly half of renters expect to pay more in rent next year.

This quarter, there appears to be a revival in renters who believe now is a good time to buy a home. After dipping to roughly half of renters last quarter (52%), the share who believe now is a good time climbed to 62% (60% a year ago). Overall, current homeowners (80%), households with higher incomes and those living in the more affordable Midwest and South regions are the most optimistic about buying right now.

The share of home owners who believe now is a good time to sell is also inching higher. 80% of homeowners think now is a good time to list their home for sale (a new survey high), which is up from last quarter (75%) and even more so than a year ago (67%).

Lawrence Yun, NAR chief economist, welcomed the news that homebuyer and seller optimism is advancing, but said it remains unclear if it will actually translate to more sales. “The housing market has been in a funk since early spring because of the ongoing scarcity of new and existing homes for sale,” he said. “The pace of new home construction has not meaningfully broken out this year, and not enough home owners at this point have followed through with their belief that now is a good time to sell. As a result, home shoppers have seen limited options, stiff competition and weakening affordability conditions.”

Added Yun, “Buyer demand is robust this fall, but the disappointing reality is that sales will continue to undershoot their full potential until supply levels significantly improve.”

More households this quarter (57%) believe the economy is improving compared to the second quarter (54%) and a year ago (48%). Continuing the complete reversal from a year ago, those living in rural and suburban areas were more optimistic about the economy than respondents residing in urban areas. A majority of home owners and those with incomes above $50,000 also had a positive outlook on the economy.

The rebound in economic confidence this quarter are also giving households increased assurances about their financial situation. The HOME survey’s monthly Personal Financial Outlook Index, showing respondents’ confidence that their financial situation will be better in six months, jumped from 57.2 in June to 62.0 in September. A year ago, the index was 58.6.

“Jobs are plentiful, wage growth is finally showing signs of life, home values are up considerably in the past five years and the stock market is at record highs,” said Yun. “The economy is not perfect, and growth overall is still sluggish, but the financial health of the typical household looks as healthy as it has since the recession.”

This quarter, non-homeowners were asked if they expect their rent to increase over the next year, and given their current financial situation, what impact paying more in rent would have on their living arrangements. Roughly half of current renters expect to pay more in rent next year (51%). If in fact their rent does increase, most will either resign their lease anyway (42%) or move to a cheaper rental. Only 15% of respondents will consider buying a home.

“Even though the typical down payment of a first-time buyer has been 6% for three straight years, two-thirds of respondents indicated that saving for one is difficult right now,” said Yun. “Rents and home prices have outpaced incomes in the past few years, and this is undoubtedly impacting their ability to put aside savings for a home purchase, even if they increasingly believe it’s a good time to buy. Heading into next year, higher home prices and limited inventory in the affordable price range will likely continue to hold back a share of renters who would prefer to be homeowners.”

The survey was conducted by TechnoMetrica Market Intelligence, Ramsey, N.J. Each month approximately 900 qualified households responded to the survey. The data was compiled for this report and a total of 2,709 household responses are represented.