Kentucky REALTOR® Confidence Inches Up In January
Sellers eager to cash in as buyers rush to lock in rates
Two out of five Kentucky REALTORS® say buyers are rushing to beat mortgage rate increases while REALTOR® expectations of house price growth continue to moderate, according to the January 2022 edition of the HousingIQ Survey of Kentucky REALTORS®.
COMPARED TO A YEAR AGO
- 42% expect house prices to increase—a 16-point drop
- 45% expect houses to stay on the market for longer—a 23-point increase
- 31% expect greater price-cutting by home sellers—a 14-point increase
- 30% anticipate an increase in foot traffic—a 14-point drop
“As mortgage rates inch up, buyers who are already in the market are speeding up the process. Looking ahead, economic volatility and higher rates will deter buyers and dampen house price growth. 39% of survey respondents reported that buyers were holding back because of concerns about the economy even as 44% said buyers are rushing to beat rate increases,” said Vidur Dhanda, author of the survey.
In the latest issue of the Home Purchase Sentiment Index, which tabulates national consumer sentiment, Fannie Mae reported a survey record-low 25% of respondents said that it was a good time to buy a house compared to 52% a year ago.
The Mortgage Bankers Association reported that the national weekly Purchase Index was 12 percent lower than a year ago.
35% of Kentucky REALTORS® reported that sellers are listing in anticipation of the market cooling. Fannie Mae reported that 69% of consumers nationally said it was a good time to sell.
Dhanda continued: “Homeowners’ ability to sell is constrained by low inventory. Very often, the sale is lifestyle or job driven and requires a corresponding purchase. We need more construction and there are early indications of an increase.”
Based on the monthly survey data, the HousingIQ/Kentucky REALTORS® Confidence Index provides a composite measure of expectations for the Kentucky housing market over the next year.
The HousingIQ/Kentucky REALTORS® Confidence Index increased two points from last month to close at 47. A value of 100 corresponds to all respondents agreeing that market conditions will improve. In contrast, 50 corresponds to respondents anticipating no change in market conditions.
The Buyer Power sub-index dropped six points, and the Price Expectation sub-index inched down two points. The Homeowner Stress sub-index continued to improve to close the month at 67.
The headline index is down four points from last year, with price expectations dropping by seven points. Compared to a year ago, buyer power has jumped 16 points, and homeowner stress has improved by nine points.
The results point to a market where price appreciation is slowing as buyer enthusiasm tempers.
The survey results are available here.