Throughout the winter, analysts and industry experts said the housing market would regain its strength this spring and summer. Now, according to the most recent National Housing Survey from Fannie Mae, a combination of rising consumer confidence and an improving job market may be about to prove them right. The survey polls 1,000 Americans each month to gauge their attitudes toward homeownership, price changes, the economy, their personal financial situation, and overall consumer confidence. The most recent survey found the number of respondents who said they think now is a good time to sell a house at a record high, while the number who were concerned about losing their job hit a record low – both encouraging signs. Doug Duncan, senior vice president and chief economist at Fannie Mae, said consumer confidence is moving in a positive direction. According to Duncan, the optimistic results are in line with Fannie Mae’s forecast of increased housing activity and gradual strengthening of the housing market this spring and summer selling season. Also among the results, 69 percent of participants said they felt now is a good time to buy a home. More here.
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Builders have an unique perspective on the housing market, demand, and where home sales are headed. And, according to the National Association of Home Builders Housing Market Index, builders’ confidence in the market for newly built, single-family homes is rising. In fact, the most recent reading shows the index up one point to 47 in April from March. The index – which measures confidence on a scale where any number above 50 indicates more builders view conditions as good than poor – found that, though builders’ perception of current conditions and buyer traffic was unchanged from the month before, their expectations for future sales rose four points to 57. Kevin Kelly, NAHB’s chairman, said builder confidence has been in a holding pattern the past three months but, as the spring home buying season gets into full swing and demand increases, builders are expecting sales prospects to improve. Also, all four regions of the country are down, according to the index’s three month moving averages. The West and Midwest show the largest decreases, though both remain near 50. The South and Northeast, on the other hand, both slipped two points, falling to 33 and 47, respectively. More here.
In 2013, home prices rose significantly but the number of homes on the market did not. This year, most industry analysts believe that home prices will continue to rise, but at a slower pace. The expected slowdown is due to the fact that as home prices increase, homeowners who have been reluctant to sell, will gain confidence in the housing market and begin putting their homes up for sale, boosting inventory and moderating the sharp price gains seen last year. This moderation will have a stabilizing effect on housing and will make for a much less volatile market this year. Until now, there hasn’t been data to support the predicted boost in for-sale inventory but new numbers from Realtor.com’s National Housing Trend Report show that the spring selling season is off to a promising start, with inventory up 10 percent over last year. This indicates that more homeowners have decided that now is the time to sell. Steve Berkowitz, CEO of Move Inc., said seller confidence is the factor to watch and that these are very encouraging indicators. According to Berkowitz, these figures indicate a continued reinforcement of the gains and market stabilization that began late last summer. More here and here.
Americans’ confidence in the economy showed little change in March from the month before, according to Gallup’s Economic Confidence Index. The index – which is based on the results of interviews conducted with more than 15,000 U.S. adults – hasn’t moved much since rebounding following last October’s government shutdown, which sent confidence plummeting. In March, 19 percent of Americans rated the economy as excellent or good, while 36 percent felt current conditions were poor. Participants who make more than $90,000 in annual household income and those between the ages of 18 and 29 were the most confident in economic conditions. Older Americans and middle to lower income respondents were less confident. According to Gallup, Americans’ level of confidence in the economy reflects a number of mixed economic signals. Positive developments, such as declining unemployment and the recovering housing market, are balanced by limited economic growth and a job market that still finds more Americans out of work than before the recession. More here.
Sales of new single-family homes fell 3.3 percent in February, according to estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development. With the drop, new home sales are now 1.1 percent below year-before levels. February’s decline was bigger than economists expected but matches recent economic and housing data showing slumping consumer confidence and slower sales and construction activity this winter. Harsh weather has been blamed for much of the downturn and February’s 32.4 percent sales plunge in the Northeast supports that theory. On the other hand, sales also fell in the South and West, where weather was less of a factor. Still, the housing market is expected to rebound as the weather warms and the sales season begins. The median sales price of new homes sold in February was $261,800; the average price was $317,500. At the current sales rate, there was a 5.2-month supply of new homes for sale at the end of the month. More here.
Since the government shutdown last October, Americans’ confidence in the economy has been on the rise. The shutdown caused a dramatic plunge in economic confidence but it bounced back quickly, with subsequent improvement bringing it back to levels last seen before the government gridlock. According to a recent release from Gallup, however, those gains stalled in February. The level of confidence in current conditions and perceptions of whether the economy is getting better or worse saw no change from the month before. But, rather than signaling a coming slowdown, Gallup feels that – with federal fiscal matters temporarily resolved – confidence should have a chance for significant improvement, especially as the seasons change. Last spring and summer saw a surge in confidence and, if this year follows the same pattern, economic confidence could reach positive levels this year, surpassing previous highs. Gallup’s Economic confidence Index is based on Gallup Daily tracking interviews conducted with more than 13,000 U.S. adults throughout each month. More here.
Since hitting its recent peak of 58 last August, builder confidence has remained above 50 through the fall and early winter, according to the National Association of Home Builders Housing Market Index. In fact, the index – which measures confidence on a scale where any number above 50 indicates more builders view conditions as good than poor – remained high through January, when it showed a reading of 56. But harsh winter weather took a toll on optimism in February, contributing to an unexpected 10-point drop in the index. Kevin Kelly, NAHB’s chairman, said significant weather conditions across most of the country led to a decline in buyer traffic which, combined with concerns about the availability of skilled workers, developed lots, and building materials, led to the dip in confidence. The results show builders less confident across all three major components of the index, though the components measuring current conditions and future sales expectations remained above 50 despite the declines. More here.