According to a recent survey conducted by Fannie Mae, the majority of respondents still believe that the economy has not fully recovered.
This belief is having an adverse effect on home sales in St. Louis and across the nation. Springtime is usually greeted by an influx of anxious consumers wanting to buy a home. Despite low interest rates, that trend has been significantly lower this year than in the past. The Fannie Mae survey shows that people are still reluctant to buy a home, citing the lagging economy and a decrease in household income. Only 21% of those surveyed were able to say that they are making more money now than they were this time last year.
Fluctuations In the Economy Still a Huge Concern
Chief economist and senior vice president of Fannie Mae, Doug Duncan, was quoted as saying that it is these concerns over economic stability and income growth are taking its toll on what should be the busiest time of year for a St. Louis real estate agent. Despite a trend in lower interest rates over the last two years, the Fannie Mae survey shows that fluctuations in the economy are still a huge concern for St. Louis residents and that it is these concerns that are holding them back from buying and selling homes.
National Housing Survey
Each month, Fannie Mae puts out a National Housing Survey to gauge consumer’s feelings about housing and the state of the economy. Since most of the questions are geared towards real estate, homebuilders use the information to ascertain their risk at the present time and mortgage REITs will use the data to forecast prepayment speeds and the effect consumer sentiment will have on the economy. The monthly phone survey polls 1,000 random Americans and asks them over 100 questions whose answers are used to track changes in consumers attitudes.
It is surveys such as these that aide realtors and lenders both to bring in potential homebuyers and help give the housing market in St. Louis the boost it desperately needs. Knowing the fears and concerns of the average consumer allows lenders like Better Rate Mortgage to make provisions and ease the minds of their clients before the application process even begins.
Will Housing Prices Go Down Payment?
For example, this month’s survey shows an increase in the amount of people who believe that house prices will go down over the next few months. In knowing that this feeling could be the cause of a consumer’s reluctance, the lender can take steps to show that the low interest rates being offered right now will offset any possible savings they could receive if they wait those twelve months for home values in St. Louis to drop again.
Professional lenders and real estate agents are looking over this information carefully to find ways in which to entice new consumers into home ownership. One of the best ways to help stimulate the economy is with home purchases; meanwhile, the lagging economy is what is causing consumers to shy away from buying right now. For more information, call Better Rate Mortgage at (314) 361-9979.
Photo credit: Bradley Gordon via Flickr