Will This Year Be Better For Buyers Or Sellers?

If you want to know whether this year is going to be good for buyers or sellers or both, you need to watch for a couple of factors. First, take a look at the housing market. A recent uptick in mortgage rates, combined with higher prices and lower inventory, have made buying a home slightly less affordable than it was a couple of years ago.

However, mortgage rates are still historically low and, though prices continue to rise, they have slowed down. That means, though affordability isn’t what it was a few years ago, buying a home remains an affordable choice. This is especially true when taken together with recent economic data. That’s because, whether or not higher rates will deter potential buyers really depends more on whether or not those buyers feel financially secure and optimistic about their prospects. In other words, if Americans continue to see better job opportunities and higher wages, they’ll be less likely to hesitate when thinking about buying a house regardless of where rates and prices go.

According to the most recent outlook from Fannie Mae’s Economic & Strategic Research Group, how things play out will depend largely on young Americans. “Tight inventory remains a boon to home prices and Americans’ net worth, but it also continues to price out many would-be first-time homebuyers.” However, our research suggests that aging millennials, now boasting higher real wages, are beginning to narrow the homeownership attainment gap.

 

This advertisement is provided by Jennifer Bixby, the broker for Don Peterson and Associates Real Estate, 100 E. 6th St. Jennifer can be reached at 402-721-9700 for answers to questions regarding real estate.

Will Wage Increases Offset Affordability Worries?

Buying a home is not something many people do without weighing the pros and cons. After all, there are a lot of factors that play into whether or not a homeowner decides to sell their house or a renter makes the jump and buys a home of their own.

Mortgage rates, home prices, employment conditions, and personal finances can all play a role for Americans deciding whether or not to enter the housing market. For this reason, Fannie Mae’s monthly Home Purchase Sentiment Index measures how consumers are feeling about their financial situation and the real-estate market in an effort to gauge overall optimism and how likely Americans are to buy or sell a home this year.

In January, the index moved up after five consecutive months of decline. The bump in optimism was mostly related to an increasing sense of job security and a spike in the number of respondents who said their household income is significantly higher than it was at the same time last year. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says optimism about economic conditions is high but whether that means more home buyers and sellers this spring remains to be seen. “Any significant acceleration in housing activity will depend on whether consumers’ favorable expectations are realized in the form of income gains sufficient to offset constrained housing affordability,” Duncan said

 

This advertisement is provided by Jennifer Bixby, the broker for Don Peterson and Associates Real Estate, 100 E. 6th St.  Jennifer can be reached at 402-721-9700 for answers to questions regarding real estate.