Despite Higher Home Prices, More Americans Say It’s a Good Time to Buy
Home prices are steadily rising and mortgage interest rates are beginning to inch up again, but that doesn’t seem to be discouraging many potential buyers.
Nearly two-thirds of Americans, 62%, said April was a good time to buy a home, according to Fannie Mae’s monthly National Housing Survey. That’s just a tad more than the 60% who felt that way in March, and 61% in April 2016.
The survey polls 1,000 Americans with more than 100 questions on their attitudes toward owning and renting a home, price changes in the housing market, and the health of the economy.
“[Historically] low mortgage rates are a top reason Americans think it’s a good time to buy,” says Sarah Shahdad, a market insights researcher at Fannie Mae. Plus, spring and summer are typically when home buying kicks into high gear. “A lot of people are thinking about getting settled before their kids start school.”
The 27% of folks in April who said now is a bad time to buy cited high home prices, she says. However, the ranks of doubters were a bit thinner than March’s 30%, and 31% in April 2016.
“Housing affordability is still a challenge for people,” Shahdad says. “Incomes have not been rising as rapidly as home prices.”
About 53% of those polled said they believe housing prices will go up in the next 12 months, and 62% said mortgage rates are likely to rise over the same time period as well. More than half, 52%, expect rental prices will also go up.
Despite those higher price tags, fewer Americans in April (57%) said it was a good time to sell a home, according to Fannie Mae. Those bullish on selling made up 60% of respondents in March. However, April’s responses showed an upward trend year over year, with 52% in April 2016 and 46% in April 2015.
Those who think it’s prime selling time cited low mortgage rates, says Shahdad. This makes it easier on the budgets of existing homeowners who don’t have to pay quite so much when they purchase their trade-up residences or downsize into smaller abodes.
Overall, Americans are feeling more optimistic because the economy is doing better, says realtor.com Â®’s senior economist, Joseph Kirchner.
About 88% of those surveyed by Fannie Mae said they weren’t worried about losing their jobs over the next year, while 25% said they’re making more money than they did last year.
“People are going to make a long-term financial commitment to purchasing a home because they have the income, they have the job, and they are more confident they are going to be able to keep that job,” he says. “People’s fears and insecurities [that] they got during the recession are waning.