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Optimism Rising on Home Ownership

Americans are increasingly confident in the housing market’s recovery, according to a Fannie Mae survey released this last week.

The mortgage-finance company’s survey found that 73 percent of consumers believe now is a good time to buy a home, rising from 72 percent a month earlier. Also, consumers expect home prices will rise 2 percent over the next 12 months, up from 1.4 percent in May.

In another strong sign, 69 percent said they would buy a home if they were going to move, up 6 percentage points from a month earlier. The percentage of who said they would rent decreased to 27 percent, from 32 percent.

The Fannie Mae survey mirrors optimism in the Bay Area, where buyers have returned to local real estate markets in numbers we haven’t seen since 2005.With mortgage rates at historic lows and home prices still a bargain, now is a great time to buy. Hefty increases in Bay Area rental prices further tilt the balance toward home ownership.

Fannie Mae’s national survey also reveals an unfortunate trend that we’re familiar with here in Sonoma Valley: the reluctance of sellers to put their homes on the market. The survey found that only 15 percent of consumers believe now is a good time to sell a home.

The difference in optimism between sellers (15 percent) and buyers (73 percent) is reflected in our Sonoma Valley real estate market, where multiple bids have become commonplace for a shrinking pool of properties. Hopefully, confidence in rising home prices will encourage more sellers to get off the sidelines — and get a bargain themselves on their next homes.

Matt Sevenau specializes in residential real estate, second homes, and income property. He can be contacted at Pacific Union International in Sonoma at 707.934.5630 or Matt.Sevenau@pacunion.com