Ever since home buying sentiment has started being tracked, there has never been more confidence in the housing market than there is right now.
According to Fannie Mae’s Home Purchase Sentiment Index, people were more confident about buying a home last month than they ever have been. The sentiment rose to 88.3% in February, the highest mark in the history of the indicator.
A big part of rising home buying sentiment comes from the growing confidence in job security. Since the indicator started being tracked in 2010, people have never been more confident about not losing their current job.
There is a lot of optimism in the economy right now, and for good reason. The economy is growing at a desirable rate, and there are hundreds of thousands of jobs being added every month.
On top of that, the Fed is also confident in the economy, and they have announced that they will raise their interest rate this Wednesday, signaling strong economic growth.
Home buyers don’t have much to worry about, except for finding the right home, the right price and the right type of mortgage.
Fannie Mae’s survey indicated that a majority of the responders expect mortgage rates to rise over the next 12 months. Rates have already been rising for the past few weeks, and while it’s nearly impossible to predict the economy 12 months down the road, rising rates wouldn’t be a huge surprise to many.
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.
If Fannie Mae’s indicator is representative of the entire country, then there is widespread optimism about the housing market.
One large, positive change from January to February was the change in the number of people who think that now is a good time to buy a home.
In January, the number of responders who thought it was a good time to buy a home dropped by three percent.
In February, there was an 11% increase in the number of respondents who think that now is a good time to buy.
Despite rising rates and a national housing shortage, home buyers are incredibly optimistic. There really isn’t much evidence to support that now is a bad time to buy a home.
With rising hourly wages, more jobs being added every month and a healthy economy that looks back on track, this could end up being an ideal time to buy a home – before mortgage rates jump up to even higher levels.
Overall Sentiment Rising
Most of the indicators in the Home Purchase Sentiment Index rose last month. While not everything was perfect, it’s hard to have economic growth and lowering home prices.
Home prices was a less-positive indicator in the report. Respondents believe that home prices will continue to rise over the next 12 months. However, anything can happen to home prices between now and March of 2018.
While prices are expected to rise, income is also expected to rise. There was a four percent increase in those that think their income will rise in the next 12 months.
If both of these indicators end up being true, then home buyers will have even more money to buy homes in 12 months.
2017 is shaping up to be an ideal year for home buyers. While 2016 saw near record-low rates, 2017 is seeing major economic growth. This equates to more, better jobs that pay a higher wage.
Those that are looking to purchase a home will want to keep their eyes on rates over the coming weeks. The Fed will be raising their rate on Wednesday, and that is all but guaranteed to raise mortgage rates.
But mortgage rates can still drop even if there is not negative economic news. It’s worth tracking rates to make sure you get the lowest mortgage rates available to you.
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.