Throughout the past couple of months, news of a tight housing market and low inventory levels has dominated news headlines. As a result, home sellers have repeatedly reported that it’s a great time to sell, while homebuyers have not necessarily agreed that it’s the right time to buy - until now. In Fannie Mae’s latest homebuyer survey, homebuying confidence shows steady increase. In fact, it has risen to match June’s all-time high. But why are confidence levels rising now? Let’s take a closer look.
Although many respondents still report home prices as the main inhibitor to buying a home, potential home buyers expect these rates to drop by next year, especially as inventory of newly built homes continues to grow. With home starts rising in a number of cities, current renters have begun scouting the market, but not for the usual starter home. Instead, Fannie Mae has found that first-time homebuyers are now skipping the safe, starter home for the latest housing models.
The increase in homebuyer confidence may also be due to a recent rise in consumer confidence for the labor market. In September, consumers not only expressed significant optimism for job growth in the months ahead, but also confidence in job security. With a higher level of confidence in the labor market overall, consumers could therefore be more willing to invest in these higher home prices (like the previously discussed first-time buyers).
With homebuyer confidence rising throughout the country, it’s a great time to discuss your housing options with a local lender. For more information about if it is the right time for you to buy a home, or to learn more about home financing in general, contact one of our mortgage specialists today.