Fannie Mae’s Home Purchase Sentiment Indexplunged from 86.7 in March to 86.2 in April. The slight drop however, pales in comparison to the number of people who believe that now is prime time to purchase, recording a historic low score of 27 percent since the metric was established.
May’s month-over-month decrease is nada compared to how it was just a few years ago. The increased enthusiasm in the viability of home purchase is seen as a major contributor to this new trend, which ironically places too much pressure on demand. With the current scarcity in available housing, the friction equally pushes home prices above the affordability limit of the majority, thereby correspondingly making purchase difficult for many.
But yes, it’s a seller’s market alright.
The metric’s peak index was 88.3, reached just February of this year. The metric was used starting in 2011.
According to the survey, which gains perspective from the response of 1000 consumers, there is a mix of expectations on whether mortgage interest rates are going to hold or rise within the next months.
After the Fed rate meeting last week which concluded in a rate hike, purchasers and refinancers might be seeing a telltale of future rate increases. But with the rise in home prices, added to the march of rates up, how can consumers manage to pay their payments?
Turns out, the positive sentiment towards purchase is fueled by another positive expectation: increase in wages. More people think that their income will be increasing in the next year.
In such case, the continued demand will drive more price increase to available units, an edge to homeowners thinking of selling their properties.
A positive future
If Fannie Mae’s survey results is any indicator, it would seem like borrowers are expecting a more affirmative future for housing. Despite the slight dip, the number remains record-high, owing to the fact that aside from a good wage expectation, a good portion of those surveyed believe that home priceswill not continue to rise within the next 12 months.
If you are thinking of selling, now could be a good time to take advantage of statistics and put up your home on a listing. But before you get busy with that, make sure you’ll get the best deal. Enlist the help of an agent who can give you insights on the dynamics of the selling process or do a thorough research on the market first, the prices of similar homes in your neighborhood, and the necessary repairs you need to make to get a higher valuation and asking price on your property, among others.