Buyers and sellers agree: it’s a good time to enter the housing market
As for mortgage rates, consumers and the industry alike are showing confidence that rates will continue to remain low. Those who believe they will rise in the coming 12 months dropped to 32%, and 49% now believe they will stay the same – up from 44% in September.
On Thursday, Freddie Mac revealed mortgage rates were the lowest ever recorded in its survey’s near 50-year history. Last week was the 15th consecutive week average rates were below 3%, and the 12th time this year mortgage rates broke their own record. How long these low rates will last is still up to debate, but in September, 13 members of the Federal Reserve’s Federal Open Market Committee said they expect to keep the central bank’s benchmark rate near zero through 2023.
As for home prices, CoreLogic’s Home Price Insights report revealed prices rising 6.7% year over year in September but estimate only a 0.2% increase the same time next year.
Last month’s HPSI mirrored those expectations in housing price gains as the percentage of respondents who say home prices will go up in the next 12 months decreased from 41% to 40%, while the percentage who said home prices will go down increased to 20%.
While the state of the housing market shines brightly for prospective buyers and sellers, the economy overall is showing some hesitation. According to Doug Duncan, senior vice president and chief economist at Fannie Mae, a divergence in purchase sentiment and personal finance sentiment caused the barely-there increase for October.
“The continuing evolution of the pandemic and the 2020 election outcomes may have longer lasting and unexpected impacts on consumer sentiment, as we saw following the 2016 elections, and we expect both factors will shape the housing market over the coming months,” Duncan said.
Consumers’ concern about their employment status and household income grew in October. The percentage of respondents who said they are not concerned about losing their job in the next 12 months decreased from 83% to 79%, while the percentage who say they are concerned increased from 16% to 21%.
The percentage of respondents who say their household income is “significantly lower” than it was 12 months ago increased from 17% to 20% and those who say it stayed the same decreased from 59% to 55%.
On Friday, unemployment numbers for October fell to 6.9% – the first time unemployment fell below half of April’s record high 14.7% peak. But that does still leave an estimated 11.1 million Americans unemployed.