For the first time in five months, people are starting to become more optimistic about the housing market.
In fact, those surveyed were optimistic about most economic measures, showing that there is a rising positive attitude about the economy and the housing market as a whole.
Notably, well over half of those surveyed stated that they have had a significant increase in their net income over the past year. This reflects the growing economy, and it is a sign of wage growth.
Also, a majority of the people interviewed stated that they are not concerned about losing their job. This is one of the highest marks for that sentiment in the past five years.
As far as home buyers are concerned, this could present a difficult time to decide whether or not to purchase a home. There is a growing fear that home prices will rise over the next year, and there is still a national home shortage.
However, mortgage rates are also expected to rise over the next 12 months. As long as wage growth outpaces the increase in home prices and mortgage rates, then homes will become more affordable over the next year.
That might not be the case, leaving home buyers in a tricky situation. Those who are planning on purchasing a home may want to check what mortgage rates are available to them before making a decision to purchase a home or wait.
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.
According to Ellie Mae, the percentage of respondents who believe that now is a good time to buy a home dropped by three percent from December’s report.
This is likely due to rising home prices and mortgage rates. As mortgage rates rise, homes become more expensive to purchase. Also, home prices have been steadily rising each month, and they aren’t expected to slow down anytime soon.
However, a majority of respondents still believe that this a good time to buy a home.
Even more respondents believe that this is a good time to sell a home. Since home prices have been rising, more and more homeowners are realizing that they can sell their home for potentially more than they bought it for.
Overall Sentiment Rising
Four of the six indicators in the Home Purchase Sentiment Index rose in January, a very positive sign for both the economy and the housing market.
As a result, the overall sentiment for home buying rose to 82.7. To put that in perspective, The overall sentiment was 66.2 in January of 2012.
The economy has been adjusting to the Trump Presidency, but it’s starting to look like things are settling down and finding new normals.
If the Home Purchase Sentiment Index is any indicator, the economy should be growing at a healthy pace over the next 12 months. This is good news for everyone, even potential home buyers.
While home prices are rising, average earning are also rising.
Mortgage rates are rising as well, but not by as much as they had been toward the end of 2016. Recently, mortgage rates have leveled out a bit, but there’s always the chance that mortgage rates will begin to fall.
Each home buyer will have to find out what’s best for them. With today’s relatively low rates, this could be the ideal time for many home buyers to commit.
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.