The results of Fannie Mae's March 2014 National Housing Survey revealed that while the housing market faces hurdles, this spring is well-positioned to show gains as consumers are generally optimistic.
The housing market typically improves during the spring as more buyers are out searching for homes. And while low inventory levels and rising mortgage rates have hampered the market from achieving its full potential, other signs remain encouraging.
Here's what the report showed:
Consumer's optimism tends to be based on the fact that the economy is showing gains, and therefore their ability to purchase a home will remain high. Doug Duncan, senior vice president and chief economist at Fannie Mae, said the housing market is proceeding in "fits and starts."
"Rising mortgage rates and a lack of supply, have dampened housing market momentum," Duncan said. "However, we see several positive signs going into this year's spring home buying season, compared with last year. For example, consumers are less pessimistic about their personal finances, and more optimistic about the current selling environment and their ability to get a mortgage. Still, those who are pessimistic about buying or selling a home today tend to point to economic conditions as the primary issue, and most consumers continue to say the economy is on the wrong track. Looking forward, we expect to see a pickup in economic growth later in the year, and this may boost the confidence of prospective buyers and sellers."
Most affordable markets
While the housing market is expected to show overall gains in 2014, certain markets will remain especially affordable.
ZipRealty, an online residential real estate brokerage, recently highlighted the most affordable housing markets for 2014 based on data from the Department of Housing & Urban Development.
Here's the list:
Chicago Philadelphia Orlando, Fla. Richmond, Va. Dallas Raleigh, N.C. Baltimore Houston Tucson, Ariz. Nashville
"In the most affordable areas of the nation, homes are available for just over twice the annual average household income," said Lanny Baker, CEO of ZipRealty. "While the cost of a home is still a very significant expenditure for families everywhere, it's interesting to see these regional differences in affordability. The cities at the top of our list are far more affordable than other places, particularly the larger California metros. Our list offers families a handful of metros where the cost of housing is relatively more affordable."
As affordability remains the primary concern for homebuyers, being thorough when finding help can make all the difference. From comparing multiple home insurance quotes to finding a trusted real estate agent, the purchasing process will be more efficient if a buyer is proactive.