October 24, 2018
The Current Status of Homeowner Demand
It would seem that there are reasons for both hope and concern in the most recent data on the state of homeowner demand.
While the National Association of Realtors indicates that home purchase rates were down to 5.34 million this August as compared to 5.42 million in August of 2017 (a decline of 1.5% year-over-year), it is a welcome bit of news that the recent August rate remained steady in pace with July’s following four months of decline.
Interestingly, the Northeast region, which encompasses our Rhode Island and Massachusetts work-area, enjoyed relatively robust gains in home purchasing. This, along with moderate increases in the number of sales in the Midwest, balanced a decline of home purchases in the Southern US, which includes Florida, the third area where Topouzis & Associates, P.C. aids our clients with title and closing services.
At the same time, the Fannie Mae Home Purchase Sentiment Index indicated a rise in home purchase sentiment in August (after months of indications of purchase sentiment falling since May), which may explain the newly steady rate of purchase mentioned above.
Jobs Up, Houses Down
While at first blush these appear reasons for hope, there are indications that give us pause.
It appears, from the same Fannie Mae index, that it is changes in the components of sentiment related to job and income security that have mainly contributed to the overall increase in positive sentiment, rather than actual increases in hopes for home purchase. Americans have begun to feel more secure that they are unlikely to lose their jobs—a gain of 15 percent in August, in fact. Yet other housing sentiment components continued to fall into the red during the same period. The volume of people who felt it was a good time to buy a home and a good time to sell a home both fell by an average of three percentage points. That isn’t enough to continue sending the overall sentiment index down; but clearly it’s the feelings about job security that have made the difference.
It’s apparent that consumers are aware that there is a dissonance between the strength of the national economy and the stuttering real estate market. The increase in cost to purchase a home over the past few years has outpaced income growth, and this presents significant barriers to home purchase, particularly at the lower end of the market.
But whichever end of the market you are dealing in, and whatever its indications of strength, we here at Topouzis & Associates, P.C. do everything we can to be absolutely sure our clients are conveying and purchasing title clear of judgments and defects, which can only serve to strengthen the security a home-buyer will feel at closing. And we help our clients put into place a good policy of title insurance to make certain they don’t get surprised by any nasty lurking issues with a property. Contact us if you’d like us to do this for you.