Renters were particularly optimistic about home buying, according to the latest Fannie Mae surveyReturn to Blog
After diving to nearly the lowest level in its history in April, an index measuring consumer viewpoint in the housing market bounced back significantly in June. Mortgage applications to purchase a home rose 5% for the week and were a remarkable 33% higher than a year ago. Renters were particularly optimistic about home buying, and it shows.
Home price gains continue to accelerate, so low mortgage rates are giving buyers much-needed help. The share of consumers who think it’s a great time to buy a home increased from 52% to 61% month to month, according to the Fannie Mae survey, while fewer Americans believe it was the wrong time to buy. Renters drove much of that improvement.
Current homeowners are also becoming slightly more optimistic about the sales market, especially given the lack of housing inventory. The percentage of respondents saying now is the right time to sell a home has increased from 32% to 41%, although nearly half still think it’s the wrong time to sell.
Home sales jumped dramatically in May, after grinding to a halt in March and April. While new listings are coming on the market, the total inventory of homes for sale at the end of May was 19% lower than May 2019, according to the National Association of Realtors. Pending sales in May, which represent signed contracts on existing homes, surged a record 44% compared with April.
Buyers are still very concerned about their job security, even as the employment picture improves slightly. Renters and homeowners with a mortgage are particularly worried, according to the survey, given the sudden record-high unemployment brought on by the pandemic.
More Americans now think home prices will strengthen, which is a double-edged sword in the market. Home prices remained elevated going into the pandemic, and affordability was weakening despite record-low mortgage rates. On that front, more respondents said they expect mortgage rates to rise over the next year.
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