The total number of people who believed that now is a good time to buy a home rose by five percent this past month.
This was coupled with a decrease in the number of buyers who thought that now was a bad time to buy a home.
According to Fannie Mae’s Home Purchase Sentiment Index, surveyed home buyers had a sentiment rating of 86.7 percent, a jump of 2.2 percent from March.
This is an incredibly high mark for the home buying sentiment, and it is near it’s highest level since the statist began getting tracked in 2011.
The increase in the sentiment comes from a rise in confidence from both home buyers and sellers. The market has been pretty hot for over a year now, and that is making homes enter and exit the market quickly.
While there is a shortage of homes, that doesn’t mean homes aren’t becoming available. Homes made available are being sold at a near record pace, making it harder for slower-moving home buyers to lock in on a house.
The housing market may not be perfect, but that isn’t stopping people from buying and selling homes.
If confidence continues to improve, then there’s a chance that the market will only speed up – meaning higher home prices and mortgage rates.
About Fannie Mae’s Housing Index
Each month, Fannie Mae surveys 1,000 consumers about their opinions on the economy and the housing market. Six of the questions asked are used to produce Fannie Mae’s Home Purchase Sentiment Index the following month.
Because the Home Purchase Sentiment Index asks respondents about their future expectations, it is often seen as a gauge of how likely people are to purchase or sell homes in the next 12 months.
Based on the data provided, consumers have a positive outlook of the housing market. The home buying sentiment hit its highest ever level in February but then dropped in March.
The rising sentiment in April is a sign that, while the housing market isn’t perfect, it is still working well for most people.
A big part of this has been mortgage rates. Over the past few months, mortgage rates have fallen despite an expectation to rise at the beginning of the year.
Those surveyed are predicting that mortgage rates will rise over the next 12 months, but current rates are still low.
The lower mortgage rates stay, the easier it is to afford a home. Low rates can also increase confidence in the housing market.
Overall Sentiment Rising
Even though the overall housing market sentiment rose in April, there were still some indicators that showed some skepticism in the housing market.
There was an increase in the number of respondents that expect home prices to rise over the next year. If this happens, it could be an issue since the average home price is already high.
Also, respondents expect mortgage rates to rise over the coming year.
Other than that, there was plenty of positive news. Respondents are increasingly gaining confidence in their job security, something that was an issue just a few years ago.
Along with that, 13 percent of respondents expect their income to increase over the next 12 months.
Fannie Mae’s report has some negative news for home buyers, but overall, it represents a positive housing market. Rising home prices are just the result of a healthy market, along with rising mortgage rates.
For those looking to buy a home, it’s worth considering that homes are also an investment opportunity. As home prices rise, the value of a purchased home will likely rise as well.
Mortgage rates change every day, and the Home Purchase Sentiment Index expects them to rise over the next year. However, that doesn’t mean they’ll rise over the coming weeks.
Those who are interested in purchasing a home will want to check rates before they make any decisions.