Nearly all young renters want to own a home, even if many are also pessimistic that economic conditions will allow them to, finds a new survey by the National Association of Realtors.
Nearly 95% of renters 34 years old or younger want to own a home in the future and overall 83% of renters said they have a desire to own, according to NAR’s new quarterly survey of renter and owner households.
But only half of all households polled—renters and homeowners—said they believe the economy is currently improving and 44% said they believe the country is in a recession. Renters were slightly more optimistic, with 57% saying the economy is improving.
More than half of renters said they haven’t yet bought a home because they couldn’t afford one, while just 19% said they prefer the flexibility of renting.
“There appears to be sizeable, pent-up demand for buying that currently remains untapped because of a variety of economic and personal reasons impacting many households,” said Lawrence Yun, NAR’s chief economist.
What Happened to Rates Last Week?
Mortgage backed securities (FNMA 3.50 MBS) gained +20 basis points (BPS) from last Friday’s close which caused fixed mortgage rates to move sideways from the prior week. But despite last week’s gains, MBS were still down -45 BPS for the month of December which means fixed mortgage rates where slightly higher at the end of month compared to the beginning of the month.
We had another holiday-shortened week that really only saw two trading sessions with any meaningful economic data. Bond trading desks were manned by skeleton-crews and we saw very light volumes.
Manufacturing: Chicago PMI: Wow…what a bad reading. Any reading above 50 is expansionary and this report had been below 50 and the market was expecting it to tick back above 50 this month. Instead, it did a nose-dive down to 42.9 which is a dismal reading. We haven’t seen a reading lower than that since June of 2009 and you know our economy was in a tailspin then. This did not have an impact on rates but has economists very concerned about Monday’s national ISM Manufacturing reading.
Housing: The October Case-Shiller Home Price Index (YOY 20 city) was a tick better than expected (5.5% vs est of 5.4%) and was good news for the housing market. The November Pending Home Sales report was lighter than expected, as the consensus estimates called for a small increase of 0.5% but they came in at -0.9% due mainly to a severe lack of available inventory.
Consumer Confidence: The December reading was much better than expected (96.5 vs est of 93.8) and November was revised upward from 90.4 to 92.6. Overall, nice solid readings.
Treasury Auctions: We had 2, 5 and 7 year note auctions last week and all of them were softer than recent trends. All three saw a pull back in demand (as measured by the bid-to-cover ratio) and we (the tax payer) had a pay a higher interest rate to borrow money to finance our debt than the last time that we went to market on these notes.
|What to Watch Out For This Week: