With spring almost upon us, experts are predicting the house hunting season will be a blowout.
Home buying confidence is up 10 percent this year, according to TD Bank’s third annual mortgage service index survey, released Tuesday.
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The survey found that 30 percent of Americans consider that this spring and ideal time to purchase a home, compared with only 20 percent at the in 2014. Additionally, 29 percent of consumers said they are likely to purchase a home this year, compared with 21 percent in 2014.
Here are three reasons why home buying confidence is up this year:
Mortgage Rates Are Low.
Mortgage rates are close to historical lows but are could rise within the year as Fed watchers speculate. Home seekers are trying to take advantage of current rates before they climb.
The Personal Savings Rate Is Up.
The personal savings rate, which represents savings as a percentage of disposable personal income, improved in January to 5.5 percent compared with 5 percent in December, according to the most recent available from the Bureau of Economic Analysis. That helps with the down payment.
The Stock Market Has Been on a Bull Run.
In the past year, the stock market has had a good run, with the S&P 500 up 9.2 percent and the NASDAQ up 12.45 percent. Since 2009, the S&P is up nearly 210 percent and the NASDAQ has soared 285 percent. Some of that money is already being redirected to the real estate market, albeit to the higher end of it, but it could spread.
“Mortgage rates are still historically low, which helps with affordability,” said Rick Huard, senior vice president of consumer lending product management at TD Bank.
Related: 5 Ways to Find Your Dream Home This Spring
“There has also been continued improvement in wage and employment statistics and with an uptick in consumer confidence, people are more comfortable making larger purchases.”
That said, it doesn’t mean there won’t be any obstacles, especially concerning housing inventory, which two in five consumers still consider low. But with home prices up 5.7 percent in January compared to last year, this could soon change.
“Home values are up year over year, leading to more homeowners in position to list a home for sale which should improve inventory,” said Huard. “It should also spur buying activity as people will move from the sidelines as we see consistent home price improvement.”
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