Homebuyers cautious despite strong economy

 Real Estate Market  Comments Off on Homebuyers cautious despite strong economy
May 232019
 

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

Homebuyers remain somewhat cautious about the housing market according the most recent Fannie Mae National Housing Survey. After last month’s blip higher, the share of respondents saying it’s a good time to buy a home resumed the downward trend that started over 5 years ago. Even so, a 14% majority of respondents still thinks it’s a good-time-to-buy.

That decline in buying sentiment largely was responsible for the 1.5 point decline in the overall survey index. It now stands almost 3 and a half points lower than at the same time last year.

The decline was a little surprising given the positive change to two of the other survey components. The net share of respondents who thinks home prices will continue rising fell 2 points, and while a 36% majority still thinks prices will rise, this share is 13 points lower than last year. A large majority, 40%, still thinks mortgage rates will rise in the next year, but that share has fallen 12 points in the last two months.

Among the other survey components, those related to personal finances remain bullish. Consumers overwhelming are unconcerned about job security and by a 22% margin say their income this year is significantly higher than it was 12 months ago.

In addition, a strong majority of respondents, 43%, still thinks it’s a good time to sell a home. That share hasn’t changed much since peaking a year ago.

Here is a link to the full report.

Housing index focused on home prices

 Real Estate Market, Residential Mortgage  Comments Off on Housing index focused on home prices
Mar 192019
 

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

Fannie Mae’s housing index was down slightly last month, continuing a slow deterioration of the index that began last year. It’s down 1.5 points since last Feb. While consumers still express strong confidence about their personal finances, their confidence in the housing market is slipping.

The overwhelming majority of respondents still expect their personal financial situation to stay the same or improve in the next year, and a 14-point majority thinks the economy is on the right track. Those percentages have changed little over the last year.

What has changed is the share of respondents who think it’s a good time to buy or sell a home. The “good-time-to-sell” component is down 6 points from last year and down 17 points from its peak last Jun. This may be a reflection of consumer’s softening expectations about home price growth. While a net 33% still expect prices to rise in the next 12 months, that’s down 19 points from the peak last year.

The “good-time-buy” component is down 7 points from last Feb, and has been declining steadily since summer of 2013. Interestingly, this also may be due to rising home prices as it’s the most frequently cited concern of potential homebuyers.

The positive takeaway is that as declining expectations for higher home prices sink in, potential homebuyers may begin to view buying a home as an affordable option again. Consumers still expect rents to rise almost twice as fast as home prices over the coming year.

Link to the full report.

Big rebound in housing sentiment

 Real Estate Market, Residential Mortgage  Comments Off on Big rebound in housing sentiment
Feb 252019
 

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

Fannie Mae’s housing index rebounded in Jan after Dec’s big drop in sentiment. Most of the gain was the result of consumers’ confidence about their personal finances. Thirty-four percent of respondents reported their income is higher this year while only seven percent said their income has fallen. This is an 11 point improvement from the index a year ago.

The overall index, which measures how consumers feel about the housing market, rose 1.2 points in Jan. However, the index is down almost 5 points from the same time last year, a negative trend that started last summer.

Three other components of the index stood out. The net share of respondents who thinks home prices will rise fell one percent, declining for the fourth consecutive month. This component is down 22 points from the same time last year.

The net share of respondents saying mortgage rates will fall increased three points. However, this component hasn’t changed much in the last year, and the overwhelming majority of consumers still think rates will rise.

Finally, the net share who thinks now is a good time to buy a home rose four points last month to 15%. It was this component that caused the Dec index to sink.

Taken together, the positive improvements in the index may signal that consumers are sensing improving home affordability, and that could portend an active spring homebuying season.

Fannie housing index says it’s a good time to buy

 Real Estate Market  Comments Off on Fannie housing index says it’s a good time to buy
Oct 312018
 

For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

By G. Steven Bray

Fannie Mae’s housing index fell slightly last month, but it remains on trend, suggesting the housing market continues to strengthen slowly. The good-time-to-buy component of the index rebounded strongly last month, gaining 5 points. Apparently, the strong economy has buoyed homebuyer sentiment enough to overcome rising interest rates. However, the component still is significantly lower than earlier in the year and is down year-over-year.

The good-time-to-sell component remained flat last month; however, it’s still trending higher and is well within reach of its recent all-time high.

Surprisingly, the components that measure personal finances both fell last month. The net share of respondents who said their income is significantly higher than last year fell by 4 points, and the net share who feel confident about job security fell 1 point. However, this last component is strongly positive (+79%), so the decrease probably isn’t meaningful. The right track/wrong track component widened to 21 points in favor of the economy being on the right track, and that could explain the strength of the good-time-to-buy component.

Neither the home price nor mortgage rate component of the index showed any surprises. Respondents still overwhelming expect home prices and mortgage rates to rise in the next year, and the net share expecting a rise increased for both components last month.