GET YOUR FREE CUSTOM RATE QUOTE
Real Estate News
If you are unable to view the message below, please click here.
 
landhome
 
Kenton Becker
Loan Officer
Office: (206) 423-2552
 

NMLS #123961 ,
Washington #MLO-123961

landhome landhome
landhome
Growing Confidence About Home
Prices Too Little Too Late
by Broderick Perkins
 

Home prices have been rising for more than a year, but a majority of consumers are just getting around to expecting home prices to rise over the next year.

Somewhat slow on the uptake when it comes to news about the housing market, 51 percent of consumers responded to Fannie Mae's April 2013 National Housing Survey that they expect home prices to go up, compared to only 32 percent a year ago.

Unfortunately, confidence is growing so slowly it could cause many homebuyers to miss the boat.

That increased confidence in housing prices for the next year comes at a time when many metros' booming home prices have been pushing affordability levels out of reach for the past year.

Since the last Fannie Mae housing survey a year ago, a buyer's market has become a seller's market as home prices jumped by double digits in many major metro areas.

"For the first time in the survey's three-year history, the majority of Americans surveyed now expect home prices to increase," said Doug Duncan, senior vice president and chief economist at Fannie Mae.

No big wup. Confidence is way behind schedule.

Some confidence is due to less financial distress at home, but that's taken some time to achieve. Confidence is also building over the growing economy in general, another slow-motion event.

The Consumer Reports (CR) Index, a measure of American's personal financial health, is at its highest level since 2008.

CR said consumer sentiment, at 54.5 and up from 50.1 last month, is a broad-based improvement, crossing all income and education groups, but the greatest gain was among lower-income consumers in households earning less than $50,000.

"It has been a real positive month for a lot of Americans. The recession has had a long tail that continues to burden lower-income families disproportionately. Improving sentiment among that group indicates that they are starting to feel better about the days ahead," said Ed Farrell, director of consumer insight at the Consumer Reports National Research Center.

That confidence has spilled over into the housing sector.

"Crossing the 50 percent threshold marks a significant milestone as most Americans believe a housing recovery is truly occurring throughout the country. Many homeowners who have been underwater are gradually returning to positive equity, and selling is now becoming an available and attractive option again," Duncan said.

The share of consumers who said now is a good time to sell climbed 4 percentage points in April to 30 percent, compared to 15 percent at the same time last year.

That's all more good news for sellers, the housing market and the economy in general, but the homebuyers are getting stuck behind the eight ball, suffering ever-rising home prices.

It's a quandary.

If prices don't rise fast enough to bring even more sellers to market to help slow down the rise in prices, confidence won't be enough for consumers to actually buy a home because they'll be priced out of the market.

Of course, if a too-few-buyers equation replaces the current too-few-homes-for-sale market conditions, prices could take a hit.

Fannie Mae also found other data that indicate a somewhat skewed recovering housing market.

Homeownership and renting

  • The average 12-month home price change expectation held steady at 2.7 percent, far below actual increases over the past year and forecasts for the next year.
  • The share of respondents who say mortgage rates will go up fell 3 percentage points to 43 percent, while those who say rates will go down increased slightly to 7 percent.
  • At a survey-high 30 percent (still less than one in three), the share of respondents who say it is a good time to sell a house increased 4 percentage points over March.
  • The average 12-month rental price change expectation held steady at 4.1 percent.
  • Forty-eight percent of those surveyed say home rental prices will go up in the next year, a 2 percentage point decrease from last month's survey high.
  • The share of respondents who said they would buy if they were going to move increased slightly to 65 percent. 

The economy and household finances

  • At 39 percent, the share of respondents who say the economy is on the right track increased 4 percentage points over March.
  • The percentage of people who expect their personal financial situation to get worse over the next 12 months fell 5 percentage points to 16 percent.
  • Twenty percent of respondents say their household income is significantly higher than it was 12 months ago, holding steady from last month.
  • Eleven percent reported significantly lower household expenses compared to 12 months ago, a 3 percentage point increase over March.

©2013 RealtyTimes

landhome
tagline
Equal Housing Opportunity Lender. Rates, Program, Fees, and Guidelines are subject to change without notice. Not a commitment to lend. Land Home only conducts business in states we are approved to. Land Home Financial Services, 22525 SE 64th Place, Suite 220, Issaquah, WA 98027. Washington Consumer Loan License #CL-89331. NMLS ID # 89331. Kenton Becker Licenses: NMLS #123961; Washington #MLO-123961. You are receiving this communication because of an existing and/or past valued business relationship, or because you have consented to receive communications from Land Home. 05-20-13  

Real Estate Articles

(Choose Month From List Below)


2013

October

September

August

July

June

May

April

March

February


2012

October