As we enter peak home-buying season, it appears that overall consumer confidence is on the rise, according to the latest information from Fannie Mae and other sources.
The Fannie Mae National Housing Survey reveals 38 percent of the share of respondents are beginning to think now is a good time to sell their home — up from 26 percent last year at the same time. Fifty-two percent of respondents also believe it’s easy to get a mortgage, matching the all-time survey high.
These numbers, combined with a rising demand in the residential housing market and expert predictions of economic growth still to come in 2014, point to a broader overall acceleration in the real estate market. And it doesn’t appear to be slowing down anytime soon.
“Looking forward, we expect to see a pickup in economic growth later in the year, and this may boost the confidence of prospective buyers and sellers,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.
Although the housing recovery continues to be erratic, a problem that Duncan attributes to rising mortgage rates and a lack of supply, consumers are less pessimistic about their financial stability and more optimistic about the current selling market.
“Consumer attitudes about the current home-selling environment have improved and now are at the most favorable level we’ve seen in the survey’s four-year history,” said Duncan.
According to the survey results, concerns about job loss among employed consumers has hit a record low, as well, further reinforcing consumer confidence.
“These results are in line with our expectations for increased housing activity and gradual strengthening of the housing market going into the summer selling season,” said Duncan.
In other good news, the Commerce Department recently reported that home sales in May jumped 18.6 percent, the largest one-month gain in 22 years. Analysts credit job creation, which has exceeded 200,000 workers for four consecutive months, and stable borrowing costs at historically low levels, for giving Americans the confidence they need to re-enter the housing market.
“Confidence is percolating up through the economy, making people reach for big purchases like new homes,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York.
Andy Warren is president of Arizona homebuilder Maracay Homes, part of the TRI Pointe Homes family of builders. He serves on the Board of Directors and as an Executive Committee member with the Greater Phoenix Economic Council and is a past board member of the Home Builders Association of Central Arizona. He is also a member of Greater Phoenix Leadership and an active member of the Urban Land Institute.