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By G. Steven Bray
Fannie Mae says consumers are stoked about housing. Does this portend an active spring home season?
Fannie’s Home Purchase Sentiment Index rose to an all-time high in Jan with 5 of the 6 survey components improving. Interestingly, the only component that didn’t improve was the percentage of households saying their income rose significantly over the last year. That result may change as the tax cuts kick in.
Of the components that rose, the main driver was respondents’ belief that home prices will keep rising. 58% said prices will rise whereas only 6% believe they will fall.
Respondents also believe this is a good time to buy a home (by a 59% to 32% margin) and a good time to sell (by a 65% to 27% margin). The good time to sell reading was also an all-time survey high. It will be interesting to see if this translates into more housing inventory this spring.
Finally, I thought it was interesting given the recent rise in mortgage rates that the share of respondents thinking rates will rise remained fairly constant. I suspect that component also may change in the coming months.