According to a recent survey by the National Association of Realtors, there appears to be a revival from renters that now is a good time to buy a home. After dipping to roughly half of renters last quarter, the share who believe now is a good time climbed to 62 percent. Overall, current homeowners are the most optimistic about buying right now amidst the steady gains in home values.
Lawrence Yun, NAR chief economist, says it is great news that homebuyer and seller optimism is advancing, but it remains unclear if it will actually translate to more sales. “The housing market has been in a funk since early spring because of the ongoing scarcity of new and existing homes for sale,” he said. “The pace of new home construction has not meaningfully broken out this year. Added Yun, “Buyer demand is robust this fall, but the disappointing reality is that sales will continue to undershoot their full potential until supply levels significantly improve.”
More households this quarter believe the economy is improving compared to the second quarter. The rebound in economic confidence this quarter is also giving households increased assurances about their financial situation. The HOME survey’s monthly Personal Financial Outlook Index, showing respondents’ confidence that their financial situation will be better in six months, jumped from 57.2 in June to 62.0 in September. A year ago, the index was 58.6.
The real estate industry has been pouring in donations to go toward supporting storm victims affected by catastrophic flooding from Hurricanes Harvey and Irma. State and local association donations to the REALTORS® Relief Foundation have totaled $1.2 million. The National Association of REALTORS® announced this week that it would give an additional $600,000 contribution to the RRF.
The RRF says 100 percent of all donations go directly to victims of natural disasters. “The devastation caused by Hurricanes Harvey and Irma is enormous, and our thoughts and support go out to all of those affected,” says NAR President William E. Brown. “The National Association of REALTORS® wants our members and the consumers they serve to know that the REALTOR® family is here for them. We encourage one and all to join NAR in donating to the REALTORS® Relief Foundation.”
The RRF was established in 2001 in response to the Sept. 11 terrorist attacks. Since then, the foundation has raised more than $26 million for housing-related aid, which supports mortgage and rental assistance for disaster victims.
Confidence in housing doubled back in August toward the all-time high in the Fannie Mae Home Purchase Sentiment Index® (HPSI), with home sellers’ optimism rebounding from July. The HPSI overall posted 88.0 in August, 1.2 percentage points higher than the month prior and moving toward the Index’s record high in June.
The share of sellers surveyed who believe now is a good time to sell rose eight percentage points to 36 percent. The discrepancy is predominantly due to home prices, says Doug Duncan, chief economist and senior vice president at Fannie Mae. Forty-eight percent of both homebuyers and sellers surveyed anticipate home prices will rise.
“In the early stages of the economic expansion, home-selling sentiment trailed home-buying sentiment by a significant margin,” Duncan says. “The reverse is true today. The net good time to sell share is now double the net good time to buy share, with record high percentages of consumers citing home prices as the primary reason for both perceptions. Such a sizable gap between selling and buying sentiment, if it persists, could weigh on the housing market through the rest of the year.”
Source: Fannie Mae
Consumer confidence kept improving in August, posting a 122.9 reading in the latest Consumer Confidence Index® from The Conference Board. The Expectations reading of the Index rose to 104.0, while the Present Situation reading rose to 151.2. July’s reading was 120.0.
“Consumer confidence increased in August following a moderate improvement in July,” said Lynn Franco, director of Economic Indicators at The Conference Board in a statement. “Consumers’ more buoyant assessment of present-day conditions was the primary driver of the boost in confidence, with the Present Situation Index continuing to hover at a 16-year high.”
The percentage of consumers who believe business conditions are “good,” as defined by the Index, increased from 32.5 percent in July to 34.5 percent in August; the percentage of those who believe business conditions are “bad” decreased from 13.5 percent in July to 13.1 percent in August. The percentage of those who expect business conditions to improve decreased from 22.4 percent in July to 19.6 percent in August; the percentage of those who expect business conditions to worsen decreased from 8.4 percent in July to 7.3 percent in August.
The headstrong supply and demand imbalances in much of the country tempered the pace of sales and caused home prices to maintain their robust growth in the second quarter, according to the the National Association of Realtors.
The national median existing single-family home price in the second quarter was $255,600, which is up 6.2 percent from the second quarter of 2016 ($240,700) as the new peak quarterly median sales price. The median price during the first quarter increased 6.9 percent from the first quarter of 2016.
Lawrence Yun NAR chief economist, said home prices in most metro areas continued their fast ascent because supply remained low. “The 2.2 million net new jobs created over the past year generated significant interest in purchasing a home in what was an extremely competitive spring buying season.”
Added Yun, “The glaring need for more new home construction is creating an affordability crisis that needs to be addressed by policy officials and local governments.”