I’m not a big fan of confidence type surveys but because there is a dearth of activity and sentiment seems to be all there is to look at, I’ll digress from usual practice.
With affordability high because of mortgage rate drops and housing prices lower than in recent years, Americans are thinking it is a good time to buy a house according to a recent Gallup Poll:
Plunging housing prices combined with historically low interest rates have persuaded 71% of Americans that now is a “good time” to buy a house — up 18 percentage points from a year ago and the highest level of housing-purchase optimism in four years.
This seems like a bit of a disconnect or the fact that people think it’s a better time to buy doesn’t equate into actually doing it.
The last time this poll reached 71% it was circa 2005, at the height of the housing market fever , yet sales activity is about half the amount it was last year. The Treasury department reported in February that there was a 35% increase in mortgage lending, but mainly due to to a surge in refinance and home equity loans.
However, other types of lending has dropped off sharply in February:
Loan origination for other consumer lending products, including auto, student and other consumer loans, decreased by 47% from January to February.
Even builders are feeling better.
It seems like this better news on housing related attitudes is more of a warm and fuzzy sign for the distant future than a tangible improvement right now. Still, thats not a bad thing.
I wonder if the supply lending has dropped off or the demand for borrowing has dropped off. I think you are right about the long term. I think we are now alert to the fact that the lenders, at least a bunch of them, have little concern for any body’s future including their own. Jobs and housing afford-ability are the issues. I’d like to see a the “good times/bads times” survey explore that a little bit. Which brings me to the observation that even with the reversion to magic bank accounting with FASB’s blessing banks are either not lending or consumers are not borrowing. Who are we kidding? Which brings me to the question; If banks don’t have to mark to market then what real difference does it make if appraisers aim at predetermined values or loans are based on stated incomes?
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There is no national housing market. The poll is meaningless.
Have you consider the number of NAR Realtors out there? According to this article: http://www.viewmylisting.com/is_nar_inflating_membership.htm
The National Association of Realtors (NAR) is inflating membership numbers. What does this say about the representatives who are assisting buyers and sellers in the market.
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Another good question would be what percentage of people are in the position (have equity and good enough credit) to buy something they want?