As confidence in the economy grows, so do the number of potential home buyers that say they’re ready to enter the housing market. According to a new survey from PulteGroup, one of the nation’s largest homebuilders, 74 percent of Americans say the economy has remained steady or improved in the last year and 57 percent think now is a good or excellent time to purchase items they need or want. And buying a home ranks high on the list of things Americans want. Among respondents, 67 percent said they plan to purchase a home in the future with 32 percent looking to buy within the next two years. Margaret Gramann, senior vice president of sales for PulteGroup, said Americans have a growing sense of optimism that the housing market is improving and that these positive changes may be sustainable. And that growing sense of optimism has boosted their interest in buying a home, with 41 percent of respondents indicating that their interest has increased over the past year. Needing more space and the view that owning a home is a smart financial investment were the top two reasons cited by participants as spurring their interest in buying a home. More here.
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Sales of newly built single-family homes fell 14.5 percent in March from February’s rate, according to estimates released by the U.S. Census Bureau and the Department of Housing and Urban Development. The decline was more than economists expected and put new home sales 13.3 percent below last year’s level. Winter weather has been blamed for much of the sales slowdown seen throughout the early months of 2014 but, according to the report, sales fell in the West and rose in the Northeast, indicating the disappointing March numbers aren’t just due to harsh weather. Still, sales estimates for December through February have since been revised upward and the sales pace over the past year is much improved from where it was in 2011 and 2012. In short, sales of new homes – just like the overall economy and housing market – have been recovering slowly ever since the financial crisis and recent recession. Analysts expect sales to continue that recovery and pick up as the year goes on. More 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.
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.
Fannie Mae’s Economic & Strategic Research Group expects economic growth to post modest gains in 2014, despite a slow start to the year. Various factors have contributed to the decline in economic activity during the first quarter of the year, including harsh weather and slower employment growth. In fact, cold winter weather has been blamed for slowing everything from residential construction to consumer spending and home sales across the country. Still, Fannie Mae expects these conditions to be temporary and believes the economy will accelerate later this year. Doug Duncan, Fannie Mae’s chief economist, said they expect the impact from special factors currently weighing on activity to reverse and believe there will be a sufficient pickup to meet their forecast for modest economic growth in 2014. More here.
According to the results of Fannie Mae’s January 2014 National Housing Survey, 65 percent of Americans say now is a good time to buy a house. And, though that number fell 2 percent from the month before, paired with an increasingly positive view of the economy, housing, and mortgage market, it indicates an improvement in Americans’ perception of current economic conditions. In fact, the share of consumers who believe the economy is on the right track was up 8 percent from last month. Also, a majority of participants said they felt it would be easy for them to get a mortgage, the first time in the survey’s three-and-a-half-year history. Doug Duncan, Fannie Mae’s senior vice president and chief economist, said the gradual upward trend in this indicator bodes well for the housing recovery and may be contributing to this month’s increase in the percentage of consumers who said they intend to buy rather than rent their next home. The share of respondents who said they would buy hit an all-time survey high of 70 percent. Conversely, the number who said they would prefer to rent also set a record, falling to a new low of 26 percent. More here.
Following a year of significant improvement in the housing market, four prominent economists are forecasting a solid 2014, according to a yearly survey from RealtyTrac. Mark Zandi, chief economist at Moody’s Analytics, believes this year should be a good one for the economy, as long as government gridlock doesn’t interfere with the progress. Zandi feels that if policymakers do no harm in 2014, the economy should do well and home prices should rise about 5 percent. The National Association of Realtors’ Lawrence Yun also expressed concern over federal policies, warning that regulations focused on lowering default risk may, in fact, restrict access to credit and impede the mortgage market. On the other hand, Chris Thornberg, principal at Beacon Economics, sees continued improvement in the housing market’s future. According to Thornberg, new home sales should be up this year and – though existing-home sales will remain around the same level as last year – there will be less investor activity and more retail buyers. Other economists cautioned that there is still room for improvement in the economy and housing market. Jed Kolko, chief economist at Trulia, is concerned that, while prices and sales volumes are now near normal levels, a shaky labor market means fewer young adults are moving out on their own and forming households. More here.