A (Slight) Boost to Homebuyer Sentiment
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Earlier this week, on January 9th, Fannie Mae has published[1] its latest Home Purchase Sentiment Index[2].
The Index has increased by 3.7 points in December to 61.0, said the company, but the index is only slightly above its all-time low in October 2022.
?Despite the slight improvement, "the [index] remains very low by historical standards, particularly the 'good time to buy' component, and respondents continue to cite high home prices and unfavorable mortgage rates as the primary reasons for their pessimism," said Doug Duncan, senior vice president and chief economist at Fannie Mae.
?Home prices are still elevated, and mortgage rates is still high compared to last year.
?Nevertheless, buyers are more optimistic about the future: The share of participants who said mortgage rates will go down in the next year increased from 10% to 14%, according to the survey.
?Buyers also expressed a belief that home prices may fall. The share of respondents saying home prices will drop in the coming year grew from 34% to 37%.
?Three of the index's six components[3] improved month over month, including those associated with homebuying conditions, mortgage rate outlook, and job security.?
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[1] National Housing Survey - Easing Mortgage Rates and Home Prices Provide Slight Boost to Homebuyer Sentiment
[2] The monthly National Housing Survey??is a nationally representative telephone survey polling 1,000 consumers a month about owning and renting a home, home and rental price changes, the economy, household finances, and overall consumer confidence. Respondents are asked more than 100 questions, six of which are distilled into a single indicator – the Home Purchase Sentiment Index?, or “HPSI” – designed to provide signals on future housing outcomes.
[3] The six indexes: 1.Good/Bad time to buy -?2.Good/Bad Time to sell -?3. Home Price Expectations – 4.Mortgage Rate Expectations – 5.Job Loss Concern – 6.Household Income