Home market sentiment hits 18-month low
Negativity about the US economy has pushed home purchase sentiment to its lowest point for 18 months. The Fannie Mae Home Purchase Sentiment Index was down 2.5 points in March and the largest drop among its components was the proportion of respondents who think now is a good time to sell a home.
“Growing pessimism over the last three months about the direction of the economy seems to be spilling over into home purchase sentiment,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The gap between the share of consumers who think the economy is on the wrong track and the share who think it is on the right track has widened.”
A third of respondents say now is a bad time to buy a home; the net percentage of those who say it is a good time to sell a house fell 8 percentage points to negative 1 per cent, as more feel it is a bad time to sell than a good time to sell for the first time in over a year.
The net share of those who say mortgage interest rates will go down rose 5 percentage points to negative 45 per cent this month, as fewer consumers say mortgage rates will go down, continuing the trend from February.
Mortgage credit was tighter in March
The availability of mortgage credit was down in March according to the Mortgage Bankers’ Association. Its index of mortgage credit availability was down 0.2 per cent to 123.5 indicating a tightening of lending standards. Government loans saw the greatest easing of restrictions while conventional saw the greatest tightening.
"On net mortgage credit availability tightened very slightly in March. Administrative changes drove declines in the availability of conventional and super conforming loan programs, and those were partially offset by slightly relaxed lending standards on government lending programs which includes FHA
, and RHS," said Lynn Fisher, MBA's Vice President of Research and Economics.
Manhattan rents down almost 3 per cent
Rents in Manhattan fell by almost 3 per cent in March compared to a year earlier. The fall, to an average $3,300, is the first for two years according to data from appraisal firm Miller Samuel for Douglas Elliman Real Estate.
CNN reports that the vacancy rate has increased to 2.4 per cent from 1.99 per cent a year earlier. The Miller Samuel report does not expect the rent declines to continue though.