Two recently released studies paint an optimistic picture of both buyer and lender confidence in the housing market. The first is Fannie Mae's second quarter 2016 Mortgage Lender Sentiment Survey, which consulted with a broad selection of lenders to glean insight into what they think of the current market.
"Lenders reported demand growth for the quarter was up 70 percent."
Encouragingly, lenders reported that demand growth for the quarter was up 70 percent, compared with 20 percent in the prior quarter (Q1 2016) and 71 percent the previous year. Across all standards, lenders on average have loosened lending standards - specifically credit standards - to make it easier for many Americans to obtain financing.
"Key survey sentiment indicators suggest that lenders remain cautiously optimistic in their market outlook," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "Additionally, the trend toward easing of credit standards appears to be tapering off, as the vast majority of lenders, around 90 percent, reported plans to keep their credit standards about the same."
"The survey was conducted before the recent May jobs report, and the weaker reported job gains might potentially temper this optimism," added Duncan. Yet in spite of these weaker than expected gains, the overall picture related to qualifying for a mortgage remains sunny, as reflected in the results of the Harris Poll on behalf of Trulia. The poll showed that, among 2,034 U.S. adults ages 18 and older, only 20 percent thought that interest rates would rise before they decided to buy.
"Homebuyers should be more worried about finding a home than interest rates," wrote Ralph McLaughlin, chief economist at Trulia. "In most markets, mortgage rates rates would have to be between 7 percent to 10 percent for financial advantages of homeownership to fall away."
While worries remained regarding home inventory, the recent narrow avoidance of the promised Fed rate hike seems to suggest that rates will stay low for the foreseeable future. This means that, if you are ready to purchase a home, now is the time. Contact New Penn Financial to get started today.