Today, I’m sharing some good news about the real estate market that stems from something called the Fannie Mae Home Purchase Sentiment Index- abbreviated as HPSI. The index is a way to track consumer confidence to either buy or sell a home. Barring a crystal ball or even one of those “Magic 8 Balls” that I had when I was a kid- this is the next best thing!
So, here’s the news, the (HPSI) increased by 5.2 points to reach 81.7 in March. What this means is that home sellers are increasingly optimistic about the future. Stimulus checks and vaccinations across the country could prove to stack up in their favor. But, the high home prices coupled with a tight inventory make it a good time to sell too, according to Fannie Mae Senior VP and Chief Economist, Doug Duncan.
However, the mortgage rate outlook did take a dip from March’s HPSI. Only 6% of the respondents think that mortgage rates will drop over the next year. The Mortgage Bankers Association also reports that applications dropped by 2.2% over the same period. Some buyers may be struggling with buyer fatigue and are simply choosing to move to the side-lines until the market cools a bit.
First time and move up buyers typically fuel a sustainable market- and to that end-we do find that some buyers who are either less willing to compromise on home features, concerned with affordability, or frustrated with the challenges from the lack of inventory and the highly competitive bidding it can take to buy a home are staying out of the market.
However, Duncan indicated that 2021 might experience higher sales overall compared to last year. In 2020 the spring home buying season was greatly hampered by pandemic-related lockdowns, and that’s why the market has had a positive momentum since those lock downs FINALLY ended.
So you might ask, “Hey Dan, what does this mean for us?”
Well, the Cincinnati Area Board of Realtors reports that June housing sales were strong. This certainly reflects that positive Home Purchase Sentiment Index I mentioned earlier. Here are some quick highlights: The median sold price difference between June 2020 and June 2021 is up 18%. In dollars, the median sold price is up an astonishing $18,000 from May 2021 which is a 7.8% increase! The market data for June shows that both Butler and Hamilton County closings are on an upward trend. Closings in Butler County were the highest they’ve been since May of 2019 with a total of 515 closings and Hamilton County saw a total of 1,152 closings in June – nearly as high as it’s been since last October.
So, that’s it. All in all, pretty darn good news for the Cincinnati real estate market! If you or someone you know is interested in buying or selling a home or just have some questions, please give me a call. Again, I’m Dan Hendricks with Keller Williams Advisors and I look forward to hearing from you soon!