How much money you spend is dependent on how much money you have. This is a simple equation and one that explains the current housing market. Though home prices have gone up recently, home buyer demand remains high. The explanation for this is that the economy is stronger and people feel more secure financially.
In short, they have more money so they’re able to afford more. Fannie Mae’s most recent Home Purchase Sentiment Index sheds light on this. The survey asks Americans for their perception of the current housing market, prices, rates, the economy, etc. According to the most recent results, 30 percent of Americans who say it’s a good time to buy a house cited favorable economic conditions as the reason they felt like the time was right.
This is a good indication that financial confidence is helping to fuel interest in buying a home. However, though the economy may be helping keep buyers interested, affordability conditions are having an effect. In fact, the overall index fell 2 points from the month before with five of the six components seeing declines.