There seems to be no end to the price boom in the housing industry. As the trend of rising home prices is yet to reach its peak, players in the market are having their own thoughts about the scenario. Discussed below are some exciting insights that demonstrate different perspectives on the market. However, irrespective of the differences in viewpoints, we can be confident about the market’s health, which is only getting stronger by the day.
Market is poised to Reach Record High
A clear depiction of the growing confidence is the Fannie Mae’s latest Home Purchase Sentiment Index, which rose 3.4 points in April to a record high of 91.7. As Fannie Mae’s chief economist pointed it out, the latest HPSI reading edged up to a new survey high, showing that consumer attitudes remain resilient going into the new buying season. The hike in property prices has boosted owning stakes in the estate, while the improved economic conditions have also attributed to the growing contentment among the property owners.
High prices spurring-up demand
A recent consumer survey conducted by the University of Michigan revealed that a record 39% of respondents said that now is an ideal time to sell homes due to high prices. Apparently, with the current worth of their properties higher than ever, the belief of cashing in on a fresh record high is catching up fast among the homeowners across the nation.
Optimism among Builders
According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) the builder confidence for newly-built single-family homes reached 70 or higher for the fourth time this year. NAHB Chief Economist believes that tight housing inventory, employment gains, and demographic tailwinds are some of the major factors that would continue to boost demand for newly-built single-family homes. Moreover, the expert thinks that the fundamentals of demand & supply equation are bound to keep the pace steady in the months ahead, which is supported by the growing optimism among the builders.
Favorable Buying Conditions
Even though home prices are high, the percentage of those who say that home purchase conditions are right is the highest it’s been since 1980. According to the University of Michigan survey, 16% of respondents indicated conditions are optimum, primarily because they believe prices are only going to go higher. While an even higher percentage of respondents – 21% – said home buying conditions are bad, this rate is still significantly lower than it was prior to the market collapse around a decade ago.
Improved Success-rate of Mortgage Applications
Mortgage application denials are down to 9.8%, the lowest rate in two decades, based on a new study by Lending Tree which analyzed 10 million recent mortgage applications. Even though one in every ten applicants still get turned down, the overall percentage has come down significantly. Again, the rate of successful applications can be credited to the considerable decrease of risks in the home buying process. It’s because the increasing property prices offer the much-needed protection for the financing institutions to redeem the loan in case the applicant defaults.
For once, having analyzed the prevailing mood of the concerning parties, it may not be wrong to assert that now is the time to make hay as the sun is shining brightly on the housing market.