Consumers Believe It Is a Good Time to Buy and Sell Homes

CF Funding is happy to share that consumer optimism has continued to rise in Fannie Mae’s April 2014 National Housing Survey, as 42 percent of respondents now believe it is a good time to sell a home. This is the third consecutive month of increases, reaching an all-time survey high. Experts predict an increase in housing activity due to these results, as well as the positive jobs data released this week and decrease in mortgage rates.

The monthly housing survey evaluates consumer attitudes in regards to homeownership, renting a home, the economy, and household finances. According to the survey, the average 12 month home price expectation rose to 2.9 percent, up from 2.9 percent last month. The percentage of respondents who believe home prices will rise in the next 12 months was at 50 percent, and the percentage who believe home prices will decrease was at an all-time survey low of 5 percent. The percentage of respondents who believe mortgage rates will rise decreased to 52 percent. Those who believe rates will go down has increased from 3 percent to 7 percent. The percent of respondents who believe it is a good time to buy a home stayed the same this month at 69 percent.

CF Funding is not surprised that the number of respondents who believe it is a good time to sell has risen by 4 percent to 42 percent, as the Spring season always brings out more buyers and sellers andmortgage rates are looking great. The fact that consumers believe rental prices will increase in the next 12 months may also affect the “good time to sell” factor. The percentage of respondents who believe the economy is on the right track has increased from 33 to 35 percent over the past month, and 14 percent expect their personal finances to improve over the next 12 months, in comparison to last month’s 12 percent. CF Funding is pleased to share that 25 percent of respondents say their household income is significantly higher than 12 months ago, up 4 points from last month.

According to Doug Duncan, senior vice president and chief economist at Fannie Mae, “Our April survey results suggest that consumer confidence is moving in a positive direction… consumer attitudes about the current home selling environment have improved and now are at the most favorable level we’ve seen in the survey’s four-year history. Consistent with Friday’s upbeat jobs report, concern about job loss among employed consumers also has hit a record survey low. These results are in line with our expectations for increased housing activity and gradual strengthening of the housing market going into the spring and summer selling season."

CF Funding will keep readers updated on the state of the housing industry as future housing surveys are released. To follow the lender on Facebook, visit www.facebook.com/cffundingcorp.  To view last months’ survey results, visit http://cffunding.com/index.php/news/consumer-attitudes-are-positive-in-march-2014-housing-survey/ .

Consumer Attitudes are Positive in Fed Survey

A survey released today by the New York Fed revealed that consumer expectations have improved in regards to the job market and household finances. Consumers are also optimistic about housing prices, as home price change declined slightly in March. CF Funding is happy to see a positive outlook returning to consumers as the economy improves.

Expectations for inflation increase rose slightly on the one-year and three-year scale. The one-year expectation rose 3.2 percent and the three-year expectation rose 3.4 percent. Expected home price change declined in all quartiles for the second month in a row, and is now at the lowest level since October 2013. Home price expectations in the West, however, are expected to grow more strongly than other areas.

In regards to the labor market, earnings growth rose to 2.4 percent, which is the highest level since the survey began in June 2013. According to the NY Fed’s Press Release, “The upper quartile has grown considerably over the past few months” and “the average perceived chance of finding a job among the currently employed (if current job was lost) rose to 49 percent.” The perceived chance of being laid off fell slightly. The age group between 40 and 60 saw about 45 percent chance of finding a replacement job, while those over 60 saw about a 30 percent chance. This was an improvement from February’s expectations, which were the lowest since the survey began (for those over 60).

CF Funding is happy to share that household income expectations were stable in the survey, and household heads under 40 have an expected income growth of 4.6 percent. More Americans believe that credit is easier to obtain in comparison to a year ago, and expectations for debt delinquency have declined slightly. This is consistent with CF Funding’s recent news article “Foreclosures Down 35 Percent from Last Year” in which the lender shared that foreclosure inventory is down 35 percent nationally from last year, and less than 1.9 million mortgages are in serious delinquency. Consumer attitudes were also positive in this month’s Fannie Mae National Housing Survey, as 52 percent of respondents believe it would be easy to get a home mortgage and 68 percent of consumers said they would buy if they were to move.

CF Funding Corporation will continue to post mortgage industry updates on the lender’s Facebook page at www.facebook.com/cffundingcorp and the CF Funding blog at http://cffundingcorporation.blogspot.com/ . Those who are looking to buy a home in 2014 should contact the lender directly at (888) 344-3080 or submit a form for a free pre-approval at www.cffunding.com. 

Vacation Sales Rise Strongly in NAR Survey

According to the National Association of Realtors’ 2014 Investment and Vacation Home Buyers Survey, vacation-home sales rose 29.7 percent last year to reach 717,000. This is quite a large jump in comparison to the previous year’s 553,000. At the same time, investment-home sales decreased by 8.5 percent in 2013, at 1.1 million in comparison to 2012’s 1.21 million investment home sales.

Vacation home sales represented 13 percent of all transactions in 2013. The improvement in vacation home sales was expected by NAR Chief Economist Lawrence Yun, who said “growth in the equity markets has greatly benefited high-net-worth households, thereby providing the wherewithal and confidence to purchase recreational property.” CF Funding is happy to see an improvement in this market, although vacation home sales are still not at their peak levels seen in 2006 (about 1/3 less). The average vacation homebuyer was 43 years old with a median household income of $85,600. Most properties purchased were within 180 miles from the purchaser’s primary residence, and 46 percent were within 100 miles.

CF Funding expected a decrease in investment activity as prices rose in 2013, as confirmed by Lawrence Yun. Yun addressed the decrease in investment purchases by explaining that “prices were rising quickly [in 2013] along with a declining availability of discounted foreclosures over the course of the year… In 2011 and 2012, investment property was a no-brainer because home prices had sharply overcorrected during the downturn in many areas, creating great bargains that could be quickly turned into profitable rentals. With a return to more normal market conditions, investors now have to evaluate their purchases more carefully and do their homework.” About 47 percent of investment home purchases in 2013 were distressed sales, and the median investment-home price was $130,000.

According to the NAR, the 2014 survey includes answers from about 2,203 homes purchased during 2013, and is controlled for age and income to limit biases in the characteristics of respondents.

Homebuyers looking to purchase a vacation home should contact CF Funding Corporation today for a free preapproval. Now is a great time to buy, but rates are rising! Call (630)328-8900 or visit www.cffunding.com.