Real Estate Market Update: A Look at the Market from Different PerspectivesMay 18, 2018
With no apparent peak in sight to rising home prices, you may wonder what the different players in the real estate market are thinking. We’ve done a little research and come up with some interesting insights that show different perspectives on the market. The good news is that just about any way you look at it, the consensus is that the market is super strong right now.
1 – Confidence in Real Estate Market Reaches Record High
Fannie Mae’s latest Home Purchase Sentiment Index rose 3.4 points in April to a record high of 91.7. “The latest HPSI reading edged up to a new survey high, showing that consumer attitudes remain resilient going into the spring/summer buying season,” said Doug Duncan, Fannie Mae’s chief economist. “High home prices and good economic conditions helped push the share of Americans who think it’s a good time to sell to a fresh record high.”
2 – It’s a Good Time to Sell
In addition to the Fannie Mae report, a recent consumer survey conducted by the University of Michigan, revealed that a record 39% of respondents – the highest percentage since 1992 –said that now is an ideal time to sell homes due to high prices.
3 – Builders Are Optimistic
May was the fourth time the builder confidence for newly-built single-family homes reached 70 or higher this year, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). “Tight housing inventory, employment gains and demographic tailwinds should continue to boost demand for newly-built single-family homes,” according NAHB Chief Economist Robert Dietz. “With these fundamentals in place, the housing market should improve at a steady, gradual pace in the months ahead.”
4 – Home Buying Conditions Are Good
Even though home prices are high, the percentage of those who say that home purchase conditions are good is the highest it’s been since 1980. According to the University of Michigan survey, 16% of respondents indicated conditions are good, primarily because they believe prices are only going to go higher. While an even greater percentage of respondents – 21% – said home buying conditions are bad, this rate is still significantly lower than it was prior to the market collapse around a decade ago.
5 – Mortgage App Denials Are Lowest in Two Decades
Mortgage application denials are down to 9.8%, the lowest rate in two decades, based on a new study by Lending Tree which analyzed 10 million recent mortgage applications. About one in every 10 persons applying for a mortgage still get turned down, but that’s pretty low when you consider that close to two persons in every 10 were turned down back in 2007 when the rate reached a height of 18.1%.
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