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Tag: homebuying

  • Housing stronger than indicated by Fannie housing survey index

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

    by G. Steven Bray

    Industry reporters focused on the negative in the latest Fannie Mae housing survey. The headline Home Purchase Sentiment Index (HPSI) dropped about 2% from Dec to a reading of 81.5. But if you analyze the survey data, I don’t think the results are as dire as the headlines would have us believe.

    The most significant negative I saw in the report is the year-long decline in the share of folks who think now is a good time to buy a home. I suspect that’s a reflection of the so-called affordability crisis. Whether a crisis actually exists, the media is beating it into people’s heads that housing is becoming unaffordable.

    On the flip side, the share of folks who think now is a good time to sell is trending higher. This could lead to more inventory hitting the market for the spring selling season.

    If concern about personal finances was the factor driving the decline in folks saying it’s a good time to buy, it’s not showing up in the survey results. The share that expects their personal financial situation to improve has been rising for the last 6m, and job security has remained steady within the survey’s margin of error during the same period. However, while folks don’t express concern about their personal situation, the right track-wrong track survey of the economy continues to grow increasingly negative.

    I noticed several other positive nuggets in the report:

    – A steadily increasing share of folks expects mortgage rates to increase in the next year. That may create a sense of urgency among potential homebuyers.

    – Respondents expect rental rates to rise almost twice as fast as home prices. Got any renters sitting on the fence?

    – And, finally, the respondents are becoming increasing positive about the ease of qualifying for a mortgage.

    Fannie’s housing survey reflects the attitudes of 1000 consumers about the housing market and the economy. Fannie has conducted the survey each month since June 2010. You’ll find a link to the survey results at the end of my blog.

    Click here for the survey results.

  • Fannie housing survey reveals cautious homebuyers

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

    by G. Steven Bray

    Fannie Mae’s Apr National Housing Survey revealed good news and bad news about the housing market. The good news was that the recent slide in consumer sentiment towards housing reversed. The bad news was consumers are becoming more wary of their ability to afford a home.

    Sixty-three percent of respondents said they would prefer to buy a home next time they move. This reverses the recent slide in this index and is up from a survey low of 60% in Mar. An increasing majority expects rental rates to increase in the next year, and the average expected rate of increase is 4.1%, much higher than the survey’s average expected home price increase. This presents a continuing opportunity to convince would-be renters to become homebuyers instead.

    Unfortunately, a declining share believes now is a good time to buy a home. Fannie cites renewed concerns about rising home prices and recent economic weakness as causing the decline. The average expected home price increase ticked up again this month, and an increasing majority believed the economy is on the wrong track. Interestingly, this result is at odds with respondents’ views of their own financial situation, which generally improved. Thus, should the economy improve this summer, this nervousness could pass quickly.

    Click here for a link to the survey results.

  • Fannie housing survey shows increasing optimism

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

    by G. Steven Bray

    The Jan Fannie Mae National Housing survey reveals increasing optimism among US consumers, which may portend a good spring homebuying season. Three results really jumped out at me.

    First, 29% of respondents said their income is significantly higher this year, and 48% expect their financial situation to improve in the coming year. Both of these figures are all-time survey highs. Also interesting, the gap between those who expect their situation to improve and those who expect it to stay the same expanded to 9 points.

    Second, the share who thinks now is a good time to sell reached a survey high of 44%. Two of the biggest impediments to the housing recovery have been stagnant incomes and lack of housing inventory. These first two survey results may indicate a lessening of these barriers.

    Finally, the share who says they would buy if they were going to move jumped 5 points to 66%, and the difference between potential buyers and renters gapped out to 37%. That means more than twice as many folks would buy as rent.

    Fannie has been conducting this survey since 2010. The survey highs are exciting, but I’ll caution you that I’ve noticed the responses about personal finances seem to mirror consumer sentiment reports. As such, the numbers are liable to fall again next month. However, I think the sell/hold and buy/rent numbers are affected by many other factors and, thus, may provide more hope for more robust spring homebuying.

  • Misinformation hurts 1st-time homebuyers

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

    by G. Steven Bray

    I see this statement way too often. “People have a hard time qualifying for a mortgage because they cannot afford the 20% down payment.” I see it in newspaper articles, which is unfortunate, but I also see it in articles written by industry insiders who should know better.

    Wells Fargo recently conducted a survey of homebuying attitudes, and 44% think a minimum 20% down payment is needed to buy a home, and respondents cited a lack of these funds as one of the biggest obstacles to buying a home. This astounded me. The same survey showed 68% think now is a good time to buy a home, yet the previous stat suggests almost half of them are sidelined because they don’t know they can qualify with as little as 3.5% down (and zero down for the military and for rural properties).

    Another survey result that caught my eye is 64% of respondents think someone must have very good credit to buy a home. This one didn’t surprise me as much because of media reports, but it still disappoints. The statement is true only when compared to the mid-aughts when lenders abounded for borrowers with 500 credit scores. Today, most lenders will accept credit scores of 620, which is truly fair credit, and I’ve seen a couple niche lenders that will allow as low as 580.

    I encourage you to help me educate potential homebuyers, especially first timers. Let’s get these folks back in the market. There are lots of good resources out there, and our Web site isn’t a bad place to start.