It’s official: we’re in a seller’s housing market. The clues certainly were not subtle. First there was the declaration that this is "the strongest seller's market ever", that home inventory is at historic low as sellers hold on to their homes and refuse to sell. We even learned it has become standard practice for buyers in hot housing markets to waive home inspection and other contingencies in their offers, while participating in heated bidding wars. A seller’s market appears to be the new normal, but will it last?
Yesterday, the Federal Reserve increased its benchmark interest rate a quarter point to a new target range of 1% to 1.25%. It was a widely watched move as it reaffirms the Fed's confidence in the country’s economic growth and signals a continuous rate-hike trend after two recent increases.
In the latest ValueInsured quarterly Modern Homebuyer Survey conducted in Spring 2017, a nationally represented sample of Americans – including homeowners and renters who want to upgrade or to buy – were asked about their opinions and predictions on interest rate movements. The majority expects to see further rate increases this year:
We certainly gave away the big reveal in the headline above, but it’s hard not to, especially after evidence from the past two weeks in our 3-part series. There has been much discussion since the recent presidential election on how Americans may endear to different or similar beliefs depending on where they reside along the municipal line. We can say when it comes to homeownership and buying attitudes, the pattern of differences seems real.
Last week, we launched a 3-part series dedicated to exploring the "Rural-Urban Divide" in how Americans view home buying differently. It appears – based on ValueInsured’s Modern Homebuyer Survey data accumulated over the past 18 months among over 6,900 homeowners, buyers and renters – Americans universally value the importance of homeownership. However, the shared value seems to end there among people who reside in hometowns of different sizes.
There are many facets along the home-buying attitudinal dimensions where urban, suburban and rural Americans diverge in their beliefs. Some of these include the perceived investment benefits of buying a home, confidence in the housing market, expectation for a housing bubble in the near term, planned length of homeownership, desired attributes in a mortgage lender, etc. The list goes on. But one of the areas that surprised this research team is the strength of the family among urban homebuyers. Let us explain…
As originally seen on MarketWatch
Our economy has come a long way since the 2007-09 recession: Wages are going up, unemployment sits at 4.4% (the lowest level since May 2007)—and we’re in the midst of the second-longest bull market ever.
What isn’t growing at an impressive pace? Americans’ confidence in the housing market.
Despite other positive economic indicators, rising home prices and uncertainty about the election left the ValueInsured Housing Confidence Index flat last summer. And while optimism briefly shot up postelection—particularly among millennials, according to the index—it’s dropped again: In March, the Fannie Mae Home Purchase Sentiment Index decreased 3.8% overall, with the percentage of Americans who think now’s a good time to buy falling 10%.
What are we so worried about?
Dubbed the great American "Rural-Urban Divide", or an "Urban-Rural Divide" sometimes when reported by writers from urban areas, there has been a lot of talk about the differences that set Americans from different locales apart. Our analysts and writers are less interested in politics, but we are curious about differences in ideals and motivations that drive American homebuyers, so we can learn to better serve and empower them.
Credit risk transfer (CRT) or sharing is the process in which the government-sponsored enterprises bundle up the mortgages they buy from lenders and sell a portion of the risk to private investors. Instead of the GSEs shouldering the loan risk alone, selected investors help offset any potential risk from loan defaults. CRT began as a test in 2012 and is now quickly ramping up as investor interest and governmental oversight grows. Governmental oversight makes sense—we don’t want another 2007. But why are more investors becoming so interested in CRT?