There's been some interesting news already this week from The Federal National Mortgage Association (FNMA), better known as Fannie Mae, the government sponsored, leading source of financing for mortgage lenders.
Fannie Mae reports that its Home Purchase Sentiment Index rose by 3.3 points in July to 86.5. This an all-time survey high, indicating a very positive outlook for the housing market nationwide.
The Index comprises a number of components, one of which is a the number of consumers who would buy if they were to move house. This figure rose to 67%, with a 26% fall in those who said they would rent when they next moved.
A Fannie Mae spokesperson suggested that this could reflect an important shift toward buying among younger people, most probably as a reaction to rising rents and lowering mortgage rates. It will be interesting to see if this trend continues as predictions that millennials would buy more homes have been beneath expectations to date.
Whatever happens, the results of this survey once more reinforce the tremendous opportunities for sellers in the current marketplace.
The national picture very much reflects the buyer patterns we've been seeing in the Albuquerque area market, where many buyers are chasing a diminishing inventory of available homes for sale.
Would-be sellers therefore need to carefully consider the current market dynamics, where there is high demand and reduced competition among sellers, promoting more robust asking prices and, increasingly, multiple offers above asking price.
The biggest trap for anyone who is delaying listing is to assume that we are in an ever-lasting trend of positive buyer sentiment here. Mortgage rates, surely the key driver of sentiment at present, do appear to look quite solid in their ultra low percentage positions at the moment. As recently as the end of last week, however, we saw some very positive jobs news that, if it sustains and international economic affairs begin to stabilize, could see the beginnings of the steady rise in rates that was predicted by almost all real estate commentators at the end of last year. Remember that the close relationship of mortgage rates to safe haven bond demand tends to produce lower rates when there is increased risk aversion.
There's also an election getting very close now and this will only gain momentum when the televised debates start at the end of next month. Thus far in the campaign, buyers do not seem to have adversely reacted to the potential uncertainties of a new administration, whoever wins, but there will unquestionably be a sharper election focus as we head into the early fall period.
While there are really no signs of a dilution in purchase sentiment, the above examples do illustrate that the current situation could change quite quickly and, for all we know, this summer may be a "perfect storm" of buying activity that we may not see again for a very long time.
Therefore those who have looked at the market and are delaying their home sale in the hope of even better profits in six to twelve months time are taking something of a gamble.
Why not talk with us today and examine the benefits of putting your home on the market in the best selling conditions for many years.