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Confidence in Housing Makes Near-Record Return

Dec 10, 2017 by

Confidence in housing made a near-record return in November in the Fannie Mae Home Purchase Sentiment Index® (HPSI), derived from Fannie’s National Housing Survey® (NHS). The HPSI overall posted 87.8 in November, 2.6 percentage points higher than the month prior. The Index hit all-time highs in February of this year, and again in June and September.

“In November, the HPSI rebounded to near its all-time high, returning the Index to its gradual upward trend and suggesting fairly stable consumer home-buying attitudes,” says Doug Duncan, chief economist and senior vice president at Fannie Mae. “These results are consistent with our expectation that the housing market will continue its modest expansion going forward.”

The share of homebuyers surveyed for the Index who believe now is a good time to buy rose seven percentage points to 29 percent, while the share of sellers who believe now is a good time to sell rose four percentage points to 34 percent. The share of those surveyed who believe home prices will go up rose six percentage points to 46 percent.

Confidence could be impacted, however, by tax reform. Both the House and Senate bills, currently in conference, contain homeownership provisions.

“Next month’s survey should offer the public a first look at the influence that potential tax reform may have on consumers’ views toward housing and the broader economy,” Duncan says.

Source: Fannie Mae

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com.

For the latest real estate news and trends, bookmark RISMedia.com.

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Housing in 2018: Where Are Home Values Headed?

Dec 5, 2017 by

Analysts are expecting even higher home prices in 2018 than originally projected, according to new research.

Zillow’s 2017 Q4 Home Price Expectations Survey reveals experts are anticipating a 4.1 percent hike in the new year, up from the 3 percent they forecasted a year ago. Over 100 experts, including economists, participated in the survey.

Their reasoning? Home-building has not panned out as planned—yet.

“The American labor market is stronger than it’s been in decades, and Americans, particularly young Americans, are increasingly feeling confident enough to buy homes,” says Aaron Terrazas, senior economist at Zillow. “Home-building has not kept pace with this surge in demand and remains well below historical norms. We don’t expect that these demand-supply imbalances will fundamentally shift in 2018. Demand will continue to grow and, though supply should increase somewhat, we still won’t build enough new homes to meet this demand, contributing to higher prices.”

Less than 20 percent of experts forecast home-building to pick up next year, the survey shows. Approximately 313,000 new homes were on the market in October, representing 4.9 months supply, according to the U.S. Census Bureau. Entry-level homes, especially, are scarce—down 20.4 percent year-over-year over the summer, reports Trulia.

Additionally, experts foresee increasing mortgage rates, with the 30-year, fixed rate ranging anywhere from 4.28 to 4.70 percent. Currently, the 30-year averages 3.90 percent, according to Freddie Mac.

“Higher mortgage rates will eat into buyers’ budgets, putting even more price pressure on the most affordable homes for sale,” Terrazas says. “Unless there is a fundamental shift in the number and type of homes for sale, this is the new normal of the American housing market.”

One factor in the health of the housing market is the homeownership rate; experts predict it, too, will rise, though slightly, to 64 percent. The homeownership rate has improved twice thus far this year, up to 63.9 percent in third quarter, according to the Census.

Beyond 2018, analysts are divided.

“Our most optimistic group of experts projects average annual home value appreciation of almost 5 percent annually through the five-year period ending in 2022, while the most pessimistic group expects an average annual rate of just 1.4 percent,” says Terry Loebs, founder of Pulsenomics, which conducted the survey in conjunction with Zillow. “I don’t foresee a stronger consensus emerging until we have greater clarity concerning tax reform and the pace of entry-level home building.”

For more information, please visit www.zillow.com.

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com.

For the latest real estate news and trends, bookmark RISMedia.com.

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A Cooldown in Housing? Not This Season

Oct 29, 2017 by

Autumn began in September, but activity in the housing market remained at summer-like levels through October, according to realtor.com®’s latest data preview. Prices in October were 10 percent higher than those one year ago, with the national median at $ 275,000 and the national median age of inventory at 73 days.

“This month we aren’t just experiencing still-summery weather—we’re also seeing a sizzlingly competitive housing market at a time when things are usually cooling off for the fall,” says Danielle Hale, chief economist at realtor.com. “With not enough homes on the market to meet the high demand, homes are selling 8 percent more quickly than a year ago even though prices are as high as they’ve ever been.

“For potential buyers who waited until fall hoping to score a bargain, the pickings are disappointingly slim,” Hale says, “but one potential bright spot for market-fatigued buyers is that new listings are up slightly from one year ago. While new listings declined in the first four months of the year, they have increased on a year-over-year basis in five of the last six months.”

The housing markets ranking in realtor.com’s Hotness Index for October:

  1. San Jose-Sunnyvale-Santa Clara, Calif.
    Median Age of Inventory: 30 days
  1. Vallejo-Fairfield, Calif.
    Median Age of Inventory: 38 days
  1. San Francisco-Oakland-Hayward, Calif.
    Median Age of Inventory: 30 days
  1. San Diego-Carlsbad, Calif.
    Median Age of Inventory: 40 days
  1. Boston-Cambridge-Newton, Mass.-N.H.
    Median Age of Inventory: 46 days
  1. Stockton-Lodi, Calif.
    Median Age of Inventory: 41 days
  1. Sacramento-Roseville-Arden-Arcade, Calif.
    Median Age of Inventory: 44 days
  1. Detroit-Warren-Dearborn, Mich.
    Median Age of Inventory: 47 days
  1. Denver-Aurora-Lakewood, Colo.
    Median Age of Inventory: 41 days
  1. Modesto, Calif.
    Median Age of Inventory: 43 days

For more information, please visit www.realtor.com.

For the latest real estate news and trends, bookmark RISMedia.com.

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