Home sellers and homebuyers are feeling good about housing market this spring, even as value of homes hit new mortgage rates and high move up.
Monthly sentiment index from Fannie Mae rose up to highest level since 2011, when survey began, thanks to surprising surge from the millennials.
Doug Duncan, Chief Economist and Senior Vice President, Fannie Mae said that Millennials showed strong increase in job confidence and gain in income, necessary precursor for the increased demand of housing from first time homebuyers.
Millennials moving out of parents’ basements and are forming new households at the faster rate, as per Fannie Mae research, but these are still overwhelming force to the rent.
Duncan added that continue slow supply of growth implies continue price appreciation and affordable constraints facing buyers in first time in many markets.
Leading edge of millennial generation however, is entering housing market in larger numbers, with some venturing out of the desired urban cores to the more affordable suburbs. Millennials delayed both parenthood and marriage, but this is now changing.
Around half of the millennial buyers have at least one child, as per report released by National Association of Realtors. This is up to 45% from 43% from last two years ago. Children are primary driver of the homeownership, which is now sitting near record low. Only 15% of the millennial buyers chose urban area, which now is down from 17% of last year and 21% of two years ago.
Lawrence Yun, a Chief Economist at Realtors said that Millennial buyers are at 85%, these are most likely the generation to view home purchase as good financial investment. Strong feelings are bode well for the greater demand in future as more as the millennials settle and begin raising the families.
The numbers which likely are far stronger of the home values being forced higher by tight supplies of home for the sale.According to CoreLogic, Home values rose by 6.9% in January years over years. It is far faster growth in income but slightly low than annual price appreciation in month of December.
Frank Martell, CEO, CoreLogic said that prices of homes are continuous to climb up across nation, and spring season for buying home is shaping up to be the strongest in the recent memory. Potent mix of the progressive economic recovery, tight housing stocks and demographics continued in lowering the mortgage rates. These mortgage rates are expected to support to robust market outlook for foreseeable future. Strongest jump in the confidence came from those people who say that it is a good time to purchase home, but the sentiments among the sellers also gained up.
More of the Americans now feeling good about the employment as well, with the fewer expecting to loosen up their jobs. More people are now reporting little hike in the household income and growing the number of expected home values to risen up. Those people who expect mortgage rates to get dropped remained unchanged for third straight month.