Improving Economy Boosts Housing Market
Well, stock market activity of recent weeks aside, the overall economy continues to improve, and that fact is a major contribution to the overall housing market, including right here in the greater Bay Area in general and Marin in particular. Take a look at the following stats.
Americans are increasingly optimistic about housing market conditions, encouraged by a growing confidence in their personal financial outlook and the U.S. economy in general. That optimism was revealed in a recent survey by Fannie Mae, the government-sponsored mortgage firm, and it gives a boost to forecasts for real estate activity in the Bay Area and elsewhere in the months ahead.
Fannie Mae said its latest Home Purchase Sentiment Index (HPSI) rose 2.4 percentage points in December to 83.2, its highest level since the index was created in June 2010.
Four of the HPSI’s six components increased in December:
- Survey respondents who said it is a good time to sell a house rose 4 percentage points to 8 percent.
- Respondents who said that home prices will go up rose 2 percentage points to 40 percent.
- Those who said they are not worried about losing their job rose 3 percentage points to 72 percent.
- Those who said their household income is significantly higher than it was 12 months ago rose 9 percentage points to 15 percent.
- Respondents who said that it is a good time to buy a house remained flat at 35 percent.
- Those who said mortgage interest rates will go down continued to decrease, dropping 4 percentage points to negative 52 percent.
“Brightening economic prospects, if sustained, should stimulate demand for homeownership,” Duncan said. “However, continuing upward pressure on rental prices and constrained housing supply, particularly for starter homes, may mean prospective first-time homebuyers could face affordability constraints.”
The Home Purchase Sentiment Index was derived from Fannie Mae’s monthly National Housing Survey, which polled 1,000 Americans in early December, asking them about their attitudes toward owning and renting a home, home and rental price changes, homeownership distress, the economy, household finances, and overall consumer confidence.
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