WASHINGTON (1/12/16)--Rising confidence in personal financial situations may provide a spark for the housing market in the coming months, according to data from Fannie Mae’s recent home purchase sentiment index.
The index rose 2.4 points to 83.2 in December, putting an exclamation point on the gauge’s strongest year on record--a 1.9% increase.
The share of consumers who reported that their income had climbed significantly climbed 9% year-over-year. Furthermore, the share of those who were unconcerned about losing their job rose 3% over that stretch.
“Consumers ended the year on an improved note with regard to their income, job security, and overall economic outlook,” said Doug Duncan, Fannie Mae senior vice president/chief economist. “This more positive consumer sentiment brought the (index) up a few points, moving the index up for all of 2015.”
The improved economic outlook of consumers could improve prospects for the housing market.
The percentage of consumers who said that now is a good time to sell a home increased 4%.
“Brightening economic prospects, if sustained, should stimulate demand for homeownership,” Duncan added. “However, continuing upward pressure on rental prices and constrained housing supply, particularly for starter homes, may mean prospective first-time homebuyers could face affordability constraints.”
Additional numbers from the report: