Several bills sitting on Governor Gavin Newsom’s desk would cut red tape and bring more in-law flats to backyards and garages across the state. The Legislature has sent the governor
A FeelGood Outlook For Incomesand Housing
Americans are seeing a bright spot in their paychecks, and their housing prospects.The share of those surveyed in Fannie Mae’s recent Home Purchase Sentiment Index® (HPSI) who reported “significantly higher household income” in 2016 increased five points to 15 percent in January, while the share of those who reported it is “a good time to sell” a house increased two points, also to 15 percent. The share of those who reported home prices will rise increased seven points to 42 percent. The Index overall increased two points to 82.7—a historical high.“Three months after the presidential election, measures of consumer optimism regarding personal financial prospects and the economy are at or near the highest levels we’ve seen in the nearly seven-year history of the National Housing Survey,” says Doug Duncan, senior vice president and chief economist at Fannie Mae.Is the feel-good outlook enough to overcome limited housing affordability? According to ATTOM Data Solutions, since 2012, the average median home price has grown 60 percent, while average weekly wages have grown 1 percent. The ATTOM Q4 2016 Home Affordability Index dropped to its lowest level since the onset of the recession, with the average homebuyer needing 36.9 percent of their income to afford a median-priced home.Worsening the affordability situation are rising mortgage rates. The share of those surveyed by Fannie Mae who reported rates “will go down” in the next year was -55 percent—the share of those surveyed who reported it is “a good time to buy a house,” by extension, decreased three points to 29 percent.“Any significant acceleration in housing activity will depend on whether consumers’ favorable expectations are realized in the form of income gains sufficient to offset constrained housing affordability,” Duncan says. “If consumers’ anticipation of further increases in home prices and mortgage rates materialize over the next 12 months, then we may see housing affordability tighten even more.”
Justin Burnham is a real estate veteran of over 15years. As a life-long resident of Orange County, Justin has a deep knowledge of its neighborhoods, schools and business areas. This, along with his st....