Latest Fannie housing survey points to improving market

 Real Estate Market  Comments Off on Latest Fannie housing survey points to improving market
Jul 292015
 

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

by G. Steven Bray

The latest Fannie Mae housing survey contains a few nuggets for the housing market. Perhaps the most exciting is consumers’ attitudes about the selling climate. The percentage who thinks now is a good time to sell a home climbed to a survey high of 52%, the first time this statistic has exceeded 50% in the survey. Given the lean inventory numbers of late, this is a welcome result.

The other nuggets are the percentage of respondents who think rents will rise in the next year increased 4 points to 59% while a decreasing percentage, 47%, think home prices will rise. Further, the average expected rent increase is 4.2%, while the average home price increase is 2.6%. Moreover, an increasing percentage believes that mortgage rates will rise in the next year. Thus, more renters may be motivated to consider buying a home and buying soon.

On the negative side, a declining percentage think now is a good time to buy. This correlates with consumers’ overall view of the economy. A majority say the economy is on the wrong track even though they view their personal situation more positively. This may represent a headwind for the market, but for those consumers who are less concerned or less cautious, it sounds like there’s plenty to motivate them to act.

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. Click here for the full survey results.

Fannie housing survey reveals cautious homebuyers

 Real Estate Market  Comments Off on Fannie housing survey reveals cautious homebuyers
May 182015
 

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.

Will Millennials save spring home buying?

 Real Estate Market, Residential Mortgage  Comments Off on Will Millennials save spring home buying?
Apr 222015
 

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

by G. Steven Bray

As we enter the spring home buying season, could the millennial generation finally move out of their parents’ basements and become the home buying generation? Recent data are conflicting, but there is reason for hope.

Millennial homebuyers have several factors working against them. Wages have stagnated since the financial crisis while home prices have recovered in many markets favored by young adults. The result is reduced affordability. Student debt also is a problem for many Millennials. Recent surveys corroborate the anecdotes – Millennials are worried about their debt loads. Even if they could afford a home, they’re more interested in reducing debt than taking on a mortgage. Finally, those debt payments make it harder for Millennials to save for a down payment. As a result, homeownership among young adults has dropped more than 6 points to 36.8% as more Millennials are doubling up with friends or just living with parents to save on expenses.

But they’re also choosing to rent, and that may be an impetus for some to consider home buying. Home ownership is at a 20+ year low, whereas rental occupancy is at a 20+ year high. The result: Rents are rising quickly in many of the same areas Millennials prefer. So, while rising home prices make a buying home less affordable, in most areas, home buying is still a better financial decision than renting.

Two other recent trends suggest we could see home buying pick up. First, wages finally may be growing. While the data trend is only a few months old, recent announcements by several major employers that they’re raising their minimum wage suggest the trend may continue. Second, recent census data shows that household formation finally is gaining steam. While most of those new households are renters, those rising rent payments could encourage more to consider a home purchase.

Encourage fence sitters to try our Rent vs. Buy calculator on our Web site. It’s eye-opening how much more expensive renting can be.