Housing Markets,
Buyer Confidence Improves

 

The National Association of Home Builders' index of improving housing markets swelled with 28 new metropolitan areas in November, including Gainesville, Fla. (pictured), and only lost six markets. A national survey by Fannie Mae also found that consumers expect housing prices and mortgage rates to rise over the next year, and the current market remains much better for buyers than sellers.

The number of U.S. housing markets showing consistent improvement expanded for the third consecutive month in November, and consumer confidence in the returning housing market continues to grow, according to recent surveys.

The National Association of Home Builders/First American Improving Markets Index (IMI) added a net 22 markets to reach a total of 125 metropolitan areas, and now spans 38 states and the District of Columbia.

The index, which identifies areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months, includes notable November additions like San Diego, Calif.; Gainesville, Fla.; Omaha, Neb.; Louisville, Ky.; and Charlotte, N.C.

''The solid increase in the number of improving housing markets this month illustrates the degree to which the housing recovery has gained momentum since we initiated the IMI last year,'' said NAHB chief economist David Crowe. ''Compared to the 30 markets that made the list as of November 2011, we now have 125, which is about one-third of all the markets surveyed for this index.''

A complete list of all areas currently on the IMI is available at www.nahb.org/imi.

The poll of 1,001 Americans by mortgage-finance company Fannie Mae found that consumers expect home prices to increase by an average of 1.7 percent over the next 12 months. Only 10 percent of those surveyed expect prices to decline, the lowest response in that category since the survey began in June 2010.

Fifty percent of those polled believe rental prices for homes will rise in the next year, and the share of respondents that believe mortgage rates will increase added four points to reach 37 percent, after a sharp September drop.

Among the respondents, a consensus that the market is best for buyers is widespread – 72 percent said it is a good time to buy, while only 18 percent thought selling would be smart, consistent with trends from the past six months.