Maybe it’s just the blue sky and sunshine or renewed stability in the stock market, but I’m feeling optimistic about the spring selling season.
Here’s why, according to the experts:
- Interest rates. Last fall’s rise in interest rates slowed buyer activity and led to an overall slowdown in home sales and price growth. The good news according to CoreLogic is that, “Fixed-rate mortgage rates have dropped 0.6 percentage points since November 2018 and today are lower than they were a year ago.” If the Federal Reserve continues its holding pattern, the current low rates could make for strong spring home sales.
- Consumer confidence. According to a survey by the National Association of Realtors conducted this past March:
– 65% of people believe now is a good time to buy a home — a slight increase over the final quarter of 2018. 37% believe this strongly, 28% believe this moderately.
– 69% of people believe that now is a good time to sell a home — the lowest recorded since Q4 2017.
– 53% of people believe overall that the U.S. economy is improving. That optimism is higher with those earning $100,000 or who live in rural areas.
– More generally, 42% of those in urban areas see the economy as improving compared to 62% in rural areas.
- Homeownership rate. The most recent Housing Vacancies and Homeownership Survey conducted by the U.S. Census shows the rate of homeownership grew for the eighth quarter in a row to 64.8% in the fourth quarter of 2018. According to Ralph McLaughlin at CoreLogic, “Young households—44 and under—have seen the largest increase, with those under 35 years old and those 35–44 seeing the largest gains, increasing from 36 and 58.9 percent to 36.5 and 61.1 percent, respectively over the past year.”
- Home prices. While home prices rose on average 4.4% in 2018, that trend appears to be slowing. In fact, according to CoreLogic, “annual home price growth has held steady or slowed each month since April of last year.” With average price growth of just 3.4 % predicted for 2019, many of the most popular and populated parts of the country where homes have been overvalued may finally be within reach for more buyers.
The Bottom Line
Of course, there’s no predicting the future. There are so many variables to consider, not the least of which is the national election season which is just beginning. Still, strong consumer confidence, a stable interest rate, and a strong desire to both buy and sell, are good omens indeed.