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U.S. Consumers Remain Confident That It’s a Seller’s Market
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In a hot real estate market with a housing shortage, historically low mortgage rates and an increase in demand for homes, consumer sentiment that it’s a seller’s market is growing.
According to the monthly Fannie Mae Home Purchase Sentiment Index (HPSI) in June, 64% said it’s a bad time to buy a home, up from 56% in May. But 77% said it’s a good time to sell, up from 67% in May. Here’s what else the HPSI revealed.
Nearly half of consumers expect home prices will rise in next year, while more than half now expect mortgage rates to increase
Almost half of American consumers — 48% — agreed that home prices will increase in the next 12 months, up from 47% in May.
Interestingly enough, the percentage who believed home prices will drop also increased, from 17% in May to 21% in June. Lastly, a quarter expected home prices to stay the same, down from 29% in May.
|Recap: Home price expectations in the next 12 months|
|Prices will increase||47%||48%|
|Prices will decrease||17%||21%|
|Prices will remain the same||29%||25%|
Meanwhile, the percentage who felt mortgage rates will rise increased to 57% in June, up from 49% in May. Those who believe rates will drop remained at 6%, while those who think they will stay the same dropped to 30%, from 38% the month before.
|Recap: Mortgage rate expectations in the next 12 months|
|Rates will increase||49%||57%|
|Rates will decrease||6%||6%|
|Rates will remain the same||38%||30%|
Fewer Americans report their household income is significantly higher than 12 months ago
The June index showed a slight decrease — 27%, down from 29% in May — among those who said their household income was far higher than a year ago.
Those who reported their income being roughly the same saw a slight bump from 54% last month to 56% now. And those who reported their income being significantly lower remained the same, at 13%.
|Recap: Household income (now and 12 months ago)|
|Income significantly higher||29%||27%|
|Income significantly lower||13%||13%|
|Income roughly the same||54%||56%|
Those looking to buy a home in a hot market can remain competitive by having their financial ducks in a row. First, there are 10 must-haves that should be on your house-hunting checklist, including a wish list and a mortgage preapproval letter.
Also, make sure to research mortgage rates ahead of time, using a home loan calculator to help for a smoother process.
Methodology: The Home Purchase Sentiment Index (HPSI) uses Fannie Mae’s National Housing Survey data to provide a single sentiment figure. The survey, conducted by phone, includes about 1,000 American consumers each month. Respondents are asked more than 100 questions on renting, homeownership, shifts in home and rental price changes, household finances, the economy and consumer confidence.