The Mortgage Corner
Spurred by a modest reduction in mortgage interest rates and favorable home prices, nationwide housing affordability in the first quarter of 2016 posted a slight increase, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) released today.
“This is the second consecutive quarter that we’ve seen a nationwide improvement in affordability due to favorable home prices and mortgage rates,” said NAHB Chief Economist Robert Dietz. “These factors, along with rising employment, a growing economy and pent-up demand will provide a boost for home sales in the second half of 2016.”
Is this causing the spike in consumer sentiment? Consumer sentiment is absolutely soaring so far this month, in the opinion of Econoday, up nearly 7 points to 95.8 for the mid-month flash. This is the best reading since June last year.
Expectations, which have been pulling down the headline index most of this year, jumped nearly 10 points to 87.5. The month-to-month turnaround for this reading is the best of the cycle, since 2006. Current conditions are also moving higher, to 108.6 from 106.7.
In all, 65 percent of new and existing homes sold between the beginning of January and end of March were affordable to families earning the U.S. median income of $65,700. This is up from the 63.3 percent of homes sold that were affordable to median-income earners in the fourth quarter.
The national median home price fell from $226,000 in the fourth quarter to $223,000 in the first quarter. Meanwhile, conforming 30-yr fixed mortgage rates are still as low as 3.25 percent in California, and 3.375 percent for a Hi Balance conforming fixed rate with a 1 pt. origination fee.
Harlan Green © 2016
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