Each month, Fannie Mae’s National Housing Survey polls Americans to assess their attitudes toward owning and renting a home, home price changes, the economy, household finances, and overall consumer confidence. In July, the survey found respondents slightly less optimistic than the month before. But despite the dip in confidence, the vast majority of participants still said they’d prefer to buy a home rather than rent if they were to move today. In fact, 65 percent said they’d buy if they were going to move, while just 28 percent said they would rent. Doug Duncan, Fannie Mae’s senior vice president and chief economist, said the residential real estate market remains strong. “It is premature to read too much into this month’s results as the survey was taken around the time of increased global turmoil, including Greece’s potential default and China’s stock market plunge, which has receded somewhat. Most of our key indicators are as strong or stronger than they were at this time last year, which is indicative of an improving housing market this year.” Also among the results, 61 percent of Americans believe now is a good time to buy a house, while 45 percent say it is a good time to sell. More here.
When it comes to home buyer preference, there are a lot of variables. Some people buy according to price, while others are looking for a particular neighborhood or style of home. A recent analysis of the Department of Housing and Urban Development’s American Housing Survey done by the National Association of Home Builders looked at what’s most important to buyers of both new and existing homes. According to the report, the top two reasons a buyer chooses a particular home are size and layout/design. In fact, 76 percent of buyers named size the most important factor and 74 percent said layout. Neighborhood came in third at 72 percent of buyers. New home buyers named similar features but added exterior appearance and construction quality to their list of deciding factors. They were also even more likely to name these features as important than buyers of previously owned homes. Among first-time buyers, the home’s price was a bigger factor than among other buyers. First timers were also more likely to look for a neighborhood that was close to work, family, and friends. Other buyers said the neighborhood they moved to would be based primarily on the house they were interested in and safety. To a lesser extent, potential home buyers were interested in buying in a good school district, though that tended to be more important to new home buyers than other types of buyers. More here.
According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for mortgage applications rose 4.7 percent last week from the week before. The increase included a 6 percent jump in the Refinance Index and a 3 percent improvement in the number of people seeking applications for loans to buy homes. Purchase application demand – which is a good indicator of future home sales – is now 23 percent higher than it was the same week one year ago. The increase in activity was a needed boost after consecutive weeks when demand for mortgage applications was relatively flat. Lynn Fisher, MBA’s vice president of research and economics, said the gains were due to average mortgage rates falling last week. “Despite recent concerns about the economy, both purchase and refinance applications increased strongly in response to lower interest rates last week,” Fisher said. “Refinance activity was the highest since May when rates were last at this level. The increase in purchase activity was also notable for this time of year, up 23 percent relative to a year ago.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgages. More here.
A new survey conducted by Ipsos Public Affairs found a majority of Americans want to buy a home and think now is a good time to do it. In fact, a full 65 percent of respondents said they feel homeownership would be a dream come true or an accomplishment to be proud of and 72 percent said now is a good time to buy. The survey also found very few current renters who said they’d prefer to continue renting. In fact, just one in ten said they prefer renting to owning. But despite their desire to own their own home, many Americans have misconceptions about what is required to achieve that goal. For example, the survey found two-thirds of participants believed they’d need very good credit in order to qualify for a home loan and nearly half thought a good credit score was something over 780. In fact, 780 is typically considered an excellent credit score. Prospective home buyers were also scared off by the down payment. Many believed that a 20 percent down payment was always required to buy a house. However, depending on the type of loan, down payment requirements can be as low as 3.5 percent. In addition to that, there are many assistance programs available to buyers who need help coming up with a down payment. More here.
The most recent results of Freddie Mac’s Monthly Multi-Indicator Market Index – which monitors several key indicators to gauge the health of local housing markets across the country – found that 43 of 50 states and 95 of the top 100 metro areas are showing an improving three-month trend. Overall, the housing market has a way to go before it matches its previous index high but a closer look at the numbers finds individual markets across the country registering improvement. Len Kiefer, Freddie Mac’s deputy chief economist, said the index continues to deliver good news. “It’s becoming clearer every month that after several years of local trends largely reflecting national trends, we are getting back to more normal times where local housing markets develop based on their own unique economies,” Kiefer said. “For example, housing markets in the West and Southwest continue to be the bright spot of the recovery and spring home buying season with strong purchase activity fueled by an improving local economy and job picture. Yet, even within these regions, MiMi shows noticeable difference.” More here.