CNBC reports that consumer confidence in housing reached a record high in July, driven in part by falling mortgage rates and strong employment.
Of the index’s five components, “confidence about not losing job” and “mortgage rates will go down” rose the most. The gains come despite a very low supply of homes for sale and affordability challenges.
Mortgage rates dropped dramatically this spring, down from a high of around 4.5% at the start of this year to 3.85% at the end of July, according to Mortgage News Daily.
“Consumers appear to have shaken off a winter slump in sentiment amid strong income gains. Therefore, sentiment is positioned to take advantage of any supply that comes to market, particularly in the affordable category. However, recent financial market events following when the survey data were collected could weigh on consumer views looking ahead,” said Fannie Mae’s chief economist, Doug Duncan.