U.S. consumer confidence in housing jumped to its highest level on record in April, according to a monthly sentiment index from Fannie Mae.
Of the index's six components, only the share of those who think it's a good time to buy fell. No surprise there, given the high competition in most of the nation's neighborhoods. The share of those who think it's a good time to sell and those who think prices will continue to rise jumped the most. In addition, more consumers think their incomes will rise over the next year, and fewer think they will lose their jobs.
Home prices stateside made their biggest jump in four years in March, up 7% compared with March 2017, according to experts who also calculated that half of the nation's 50 largest metro markets are now considered overvalued. That is based on prices being at least 10% higher than the long-term sustainable average.
While more Americans are less concerned about losing their jobs, just 18% said their household income is significantly higher than it was a year ago, according to the Fannie Mae survey. While that is a slight gain compared with March, it doesn't exactly mean potential buyers are swimming in cash. Home prices are rising far faster than incomes.
Demand, however, continues to rise as the largest generation, millennials, moves solidly into the home buying years. While supply is lowest on the low end of the market, a growing number of first-time buyers are buying move-up homes, instead of entry-level homes. That is because millennials waited longer, following the recession, to become home buyers, meaning they are likely in higher-paying jobs than previous generations of first-time buyers
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