The spring housing market is seeing increased activity, with more properties available and eager buyers emerging as winter ends.
The Fannie Mae Home Purchase Sentiment Index rose by 2.1 points in February, marking its third consecutive monthly increase, reflecting growing confidence in the real estate market.
However, a significant portion of potential buyers remains pessimistic, primarily due to expected increases in housing prices and less optimism about future mortgage rates. Despite this, new construction homes remain popular among buyers, with a notable increase in interest compared to previous years.
With more properties on the market and buyers ready to buy now that the winter frost has passed, the spring purchasing season is heating up.
With more properties on the market and buyers ready to buy now that the winter frost has passed, the spring purchasing season is heating up. (Photo : by Tierra Mallorca / Unsplash)
The home-selling conditions index, or Fannie Mae Home Purchase Sentiment Index, rose by 2.1 points in February. The index has climbed for three months running.
This surge is mostly the result of confidence that is gradually permeating the real estate market as circumstances for sales are starting to improve.
Even while 19% of would-be homeowners believe now is a good time to buy, a large portion of buyers remain gloomy.
Also, prospective purchasers are less optimistic about the current state of mortgage rates. The percentage of poll participants who believe that interest rates will drop over the next 12 months dropped from 36% to 35%.
If you're prepared to take advantage of these reduced rates, now could be the right moment to think about getting a mortgage. Interest rates are still lower now than they were during the pandemic's peak. Without affecting your credit, a website such as Credible can show you many mortgage lenders and provide you tailored quotes in a matter of minutes.
During the pandemic, new buildings became a buyer's sanctuary since fewer listings of existing properties were available. Numerous purchasers continue to be drawn to new developments. According to a Zillow survey, almost half of potential buyers last year favored to look for newly constructed houses.
42% of purchasers who expressed a desire for new build houses stated that new construction was their only option. This represents a ten percentage point increase from 2021 and a six percentage point increase from 2022.
Across the nation, there are more and more listings for homes. According to Redfin, the number of listings for all homes rose 3.8% in February compared to the previous month. In the last six months, this is the biggest growth.
Mortgage Rates Not Dropping Anymore Beyond 6 Percent
Although 30-year fixed mortgage loans are currently anticipated to stay around 6.4% at year's conclusion, Fannie Mae indicated in its most recent rates prediction that mortgage rates will conclude the year around 5.9%.
Because of stronger than projected employment data and greater than anticipated inflation, the Federal Reserve isn't lowering rates as quickly.
