More consumers may be looking to purchase homes with a shift in several key housing market indicators, according to Fannie Mae’s March 2012 consumer attitudinal National Housing Survey. More Americans now expect both home rental and home purchase prices to increase over the next year. Nearly half of consumers expect higher rental prices, the highest number recorded since monthly tracking began in June 2010. These trends may be providing Americans with an increased sense of urgency to buy a home as 73 percent of Americans now believe it is a good time to buy a home, up from 70 percent in February.
Highlights of the survey include:
Thirty-three percent of respondents expect home prices to increase over the next 12 months, a five percentage point increase from last month, the highest level over the past 12 months.
On average, Americans expect home prices to increase by 0.9 percent over the next 12 months (up slightly since last month).
Thirty-nine percent of Americans say that mortgage rates will go up in the next 12 months, a five percentage point increase from last month.
On average, respondents expect home rental prices to increase by 4.1 percent over the next 12 months, a significant increase since February, and the highest number recorded to date.
Forty-eight percent of respondents think that home rental prices will go up, a three percentage point increase from last month and the highest number recorded to date.
Sixty-six percent of respondents say they would buy their next home if they were going to move, up one point since last month, while 30 percent say they would rent, up one point versus last month.
http://www.fanniemae.com/portal/about-us/media/corporate-news/2012/5690.html
The Wall Street Journal
Loans closed by banks and mortgage lenders in February had borrowers with a credit score of 750, up from 740 six months earlier, and an average loan-to-value ratio of 76 percent. The average denied loan had a credit score of 699 and a loan-to-value ratio of 83 percent.
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http://blogs.wsj.com/developments/2012/04/04/are-mortgage-credit-standards-loosening-hint-no/
Calif. median home price: February 2012: $266,660 (Source: C.A.R.)
Calif. highest median home price by region/county February 2012: Marin, $732,140 (Source: C.A.R.)
Calif. lowest median home price by region/county February 2012: Tehama, $85,000 (Source: C.A.R.)
Calif. Pending Home Sales Index: February 2012: 127.8, an increase from the revised 102.4 recorded in January.
Calif. Traditional Housing Affordability Index: Fourth quarter 2011: 55 percent (Source: C.A.R.)
Mortgage rates: Week ending 3/29/2012 30-yr. fixed: 3.99% fees/points: 0.7% 15-yr. fixed: 3.23 fees/points: 0.8% 1-yr. adjustable: 2.78% Fees/points: 0.6% (Source: Freddie Mac)
Wall Street Journal
For homeowners who have been waiting for interest rates to fall even further before refinancing, it might be time to pull the trigger on a deal. Rates are moving up – and could stay higher for a while, experts say.
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http://online.wsj.com/article/SB10001424052702303812904577295762407392928.html?mod=WSJ_RealEstate_LeftTopNews
Fannie Mae’s latest quarterly National Housing Survey focuses on the state of homeownership aspirations among Americans across all demographic groups. The survey finds that despite the recent housing crisis, most Americans continue to believe that owning their home is preferable to renting it. The data also indicate that while financial constraints and employment concerns may be keeping potential home buyers on the sidelines in the near term, future improvements in employment and personal finances, a pickup in interest rates in response to stronger economic growth, and stabilizing home prices may move Americans to act on their aspirations in coming years.
- Across all education levels, Americans say owning makes more sense than renting. This belief is held consistently across all demographic groups.
- Nearly two-thirds of current renters say that they will buy a house at some point in the future.
- Non-financial factors such as safety and quality of local schools continue to be the top reasons for buying a home across all income groups.
- African-Americans and Hispanics are more likely to cite various benefits, such as buying a home as a way to build wealth, homeownership as a symbol of success, and civic benefits.
Attitudes about homeownership as an investment, financial constraints, and mortgage accessibility may mean that more Americans choose not to act on their aspiration for homeownership, thus potentially leading to lower homeownership rates.
- The margin of Americans believing homeownership has the highest investment potential has declined over the past several years.
- At the same time, the perceived safety of owning a home as an investment has trended downward, reaching a low of 63 percent in the fourth quarter of 2011.
- In turn, groups with higher levels of education and higher incomes are more likely to think buying a home is a safe investment.
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