Two recent reports, one by Fannie and another by Trulia, an online marketplace, indicate that consumers may be a little less optimistic when it comes to homeownership.
The Fannie Mae Home Purchase Sentiment Index declined for the fourth straight month in November by about a half a percent (not much). This included information gathered both pre and post-election.
Interestingly, Trulia found that since the election Republicans’ housing optimism increased 26% while Democrats’ dropped 23%. Overall, those who still view homeownership as part of the American dream dropped by 3% to 72%. Sad. The good news is that 83% of Millennials say they plan on making a home purchase at some point in the future. The big question is when.
Some other consumer view stats:
- Good time to sell; down 6% ↓
- Bad time to sell; up 2% ↑
- Good time to buy; down 1% ↓
- Believe household income is significantly higher; up 11% ↑
- Think home prices will rise; up 4% ↑
Economists say all this should be taken with a grain of salt as these results come in the midst one of our most historic presidential elections. Much will have to do with how the economy and the housing market fairs, along with how high rates go, once the new administration is in place. These only represent how consumers’ presently feel. We know that feelings can change quickly, depending on circumstances.
The key is a stronger economy; one that will provide better job security, job opportunities, and increased wages. Such will provide the security and motivation for people to buy their first home or take the step up to a new one.
So, let’s concentrate on the good news;
- 83% of Millennials plan to buy. (They represent the largest single generation.)
- Republicans are bullish on housing
- Household income is on the rise
BTW, one more bit of good news. Homeowner equity has risen 11% since 2015. More equity means more money available for a down payment on a new home, or the potential for a refinance or equity line to pay off some current debt, i.e. student loans.
All present opportunities to lend. So, let’s accentuate the positive. Let’s get ready for the new purchase market in 2017. There will be plenty of opportunities to lend and make money as long as you know where to look, how to play and the rules of the game.
Just remember, the game has changed. Play different.