Fannie Mae Archives

Confidence In Housing Market Rebounds

Fannie Mae’s Home Purchase Sentiment Index measures Americans’ perceptions of the housing market, including whether they feel it’s a good time to buy or sell a house and their expectations for home prices and mortgage rates over the next year. In September, the Index found consumers are more secure in their jobs and more likely to feel now is a good time to enter the market. “The HPSI returned near its record high this month, driven primarily by improvement in attitudes about selling a home and strengthening home prices,” Doug Duncan, Fannie Mae’s senior vice president and chief economist, said. “With consumers’ expectations for rental price increases continuing to outpace their expectations for home price growth, many consumers may view homeownership as a more attractive option.” In fact, 64 percent of respondents said they felt like it was a good time to buy a house. Also in the report, the vast majority of Americans say they don’t fear losing their job and nearly a third reported that their household income has gone up significantly over the past year. The combination of increasing financial security and an attractive environment for potential home buyers and sellers indicates that the housing market should see continuing gains in the months ahead. More here.

Lenders Say Credit Standards Have Eased

Fannie Mae’s quarterly Mortgage Lender Sentiment Survey polls senior executives to assess their views and outlook on a number of topics related to the mortgage market. The results provide an insider’s perspective on credit standards, demand, the economy, and more. According to the most recent survey, when asked whether their lending organization’s credit standards have eased, tightened, or remained unchanged over the past three months, the gap between those saying they’ve eased and those reporting stricter standards increased to 20 percent, a new survey high. Doug Duncan, senior vice president and chief economist at Fannie Mae, said it was the first time in seven quarters that there was a pronounced increase in the share of lenders reporting on net an easing of credit standards. “This is a significant result in light of public discourse on credit availability and standards,” Duncan said. “Overall, we expect that lenders’ tendency toward easing credit standards, together with relatively low mortgage rates and a strengthening labor market, will continue to support the housing market expansion.” More here.

Housing On Track Despite Economic Volatility

Fannie Mae’s Economic and Strategic Research Group releases an updated outlook for the economy and housing market each month. Their forecast provides a good view of where things are and where they’re headed. According to this month’s release, recent economic volatility may cause heightened concern on Wall Street but shouldn’t negatively affect economic growth or the progress the housing market has made over the past year. In fact, Fannie Mae points to an uptick in consumer spending, full-time employment surpassing its pre-recession peak, and the fact that average hourly earnings have increased as an indication that the economy will remain on track through the end of the year. Their housing market forecast also remains mostly unaffected by recent data. “Continued strong performance of year-to-date home sales and modestly weakening leading indicators confirm that our prior forecast of existing home sales this year remains valid,” Doug Duncan, Fannie Mae’s chief economist, said. “However, lower actual and projected cash sales led us to revise slightly higher purchase mortgage originations.” In fact, Duncan believes total mortgage originations this year will be up approximately 25 percent over last year. More here.