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.
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.