According to Fannie Mae’s October Housing Survey, consumer attitudes toward purchasing real estate is described as volatile. The number of people who have favorable opinions about purchasing homes is down. This has been caused by a decrease in buyer optimism toward raises in household income and worries over looming interest rate hikes. Many people are not experiencing a significant increase in salaries and are scared of rising rates.
Last month, the number of individuals who felt market conditions favored buying fell 2 percent, and the number of individuals who felt the market was conducive to selling decreased by 6 percent. Certain individuals expressed feelings that home prices would increase as well. All of these responses back the idea buyers are hesitant about making long-term financial decisions. On a positive note, 85 percent of respondents felt confident about their job security.
For renewed momentum in the housing market, more income growth is necessary. Unemployment rates have dropped, but many people still do not make enough money to be comfortable with home buying. Although confidence in job security is presently high, salary levels remain stagnate. Until noticeable improvement is seen in wages, many consumers will be unwilling to buy or sell homes. Despite these feelings, the HPSI has reached near-record levels for the past four years.
Since this time last year, the overall HPSI is up 0.7 percent. Over the last four years, it has increased by 22.6 percent. Although there is still room for improvement, things have remained steadily optimistic. When consumers get over their fears, you will see a giant boost in the real estate industry.
