Should consumers buy now? Inman certainly thinks so.
The number of consumers who plan to buy now rose to 6.9 percent in December, up from 5 percent in the month before, according to a monthly economic outlook released by Fannie Mae’s Economic & Strategic Research Group.
Those Aren’t the Only Numbers Climbing to More Satisfying Levels
Despite reservations about mortgage availability, Fannie Mae economists reported that the number of consumers who were changing their attitudes about the ease of getting a mortgage was at the highest level in the 3 1/2-year history of its National Housing Survey.
“This result is consistent with the Federal Reserve’s survey of senior loan officers who reported that they have eased lending standards for residential mortgages over the past year and thus should offset some negative impact stemming from the current higher interest rate environment,” Fannie Mae economists said.
The Housing Market is Also Boosting the U.S. Gross Domestic Product (GDP)
The GDP will likely come in at 2.9 percent for 2014, up from an estimated 2.6 percent the year before. Of that growth, Fannie Mae foresees that 0.6 percent will come from housing—more specifically, new homebuilding activity, which is up from 0.3 percent in 2013.
“Despite the rise in mortgage rates since the spring, many housing indicators posted strong gains at the end of 2013 and consumer housing attitudes are strengthening, all of which bodes well for continued but measured housing recovery in 2014,” said Fannie Mae Chief Economist Doug Duncan said in a statement.
New-home Sales and Single-family Home Permits Are Up. Consumers More Likely to Buy Now
In October, new-home sales skyrocketed to their highest level since July 2008, and single-family home permits reached their highest level since April 2008, according to the article. In November, housing starts increased for the second straight month, rising to a recovery high and surpassing the 1 million mark for only the second time in the current recovery, Fannie Mae said.
“The new-home market has benefited from declining competition from foreclosures and distressed sales. With increased momentum late in 2013, we expect both new-home sales and housing starts to post double-digit rises again this year amid an improving employment picture, rising confidence and high pent-up demand,” Fannie Mae economists said.
The Median Home Price Will Rise
Fannie Mae economists project the median price of a current home will rise 6.7 percent, annually, in 2014, to $208,000. They expect the median price of a new home to increase 6.8 percent, to $283,000.
However, Fannie Mae anticipates that median prices of both new and existing homes will rise about 5 percent more in 2015.
Existing-home sales are expected to rise 1.7 percent this year compared to 2013, while new-home sales are expected to see a 20.2 percent rise. Single-family housing starts are projected to climb even higher, by 23.6 percent.
All three are expected to see further increases in 2015, by 3.3 percent, 30 percent and 29.6 percent, respectively.