Potential homebuyers might want to hop off the sidelines, as housing confidence is regaining its mojo.
Building even more on the advance of the prior month after nearing the shadow of a survey low in April, there was a spike of 9 points in June to 76.5 in the Fannie Mae Home Purchase Sentiment Index (HPSI), according to Fannie Mae.
There was a month-over-month hike in four of the six HPSI components as consumers reported a brighter outlook on the homebuying and selling climate. That’s not to mention increased optimism over price appreciation. The HPSI sagged 15 points year over year.
Thanks to the second month of improvement in June, the HPSI regained some of the sharp losses in optimism in March and April, said Doug Duncan, SVP and Chief Economist.
“The share of renters who say it’s a good time to buy a home is now at its highest level in five years. That suggests favorable conditions for first-time homebuying, consistent with the recent rebound in home purchase activity,” Duncan said.
Homeowners, it seems, have noticed the subsequent housing supply dearth, with an increased share saying it’s a good time to sell a home, he continued. That said, this activity may cool again in the coming months, depending on the extent to which it can be attributed to consumers having chosen to delay or to accelerate homebuying plans due to the pandemic, Duncan added.
In May, all offers sparked a bidding war, up from 43.9% in April, according to a Redfin report.
Sellers were making their way back into the housing market in aftermath of the country’s reopening following the COVID-19 lockdown, experts indicated. On top of that, buyers were chomping at the bit to dive back into home buying. Not surprisingly, that precipitated a gaping lack of housing.
Among the survey’s 24 metro areas, the highest competition among buyers submitting bids were Boston, Dallas and Washington, D.C.; Salt Lake City; Denver; Seattle; Austin; San Francisco; San Jose; Minneapolis; Los Angeles; and Portland were among other metros high on the list.
Not so coincidentally, perhaps, home builder confidence also is on the upswing, reported the National Association of Home Builders (NHB)/Wells Fargo Housing Market Index (HMI) survey.
There was a spike of 21 points to 58 in builder confidence for new single-family homes in June. Noteworthily, a positive market is signaled by anything hovering over 50.
Contributing to this mindset is a tight housing inventory combined with the spiraling number of submitted mortgage applications. Other elements include current low-interest rates.