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52 | Th e M Rep o RT o r i g i nat i o n s e r v i c i n g a na ly t i c s s e c o n da r y M a r k e t ANALYTICS the latest americans' economic optimism spills over into Housing Improving outlooks on personal finances are spurring homeowners to say now is a good time to sell or purchase a home. a fter suffering a setback in December, American attitudes toward the housing market recovered in January, with more consumers saying it is good time to get off the sidelines. Sixty-seven percent of American adults responding to Fannie Mae's January National Housing Survey said now is a good time to buy a home, the company reported, while 44 percent said now is a good time to sell. Both figures are up from December, when positive responses were at 64 percent and 40 percent, respectively. Doug Duncan, SVP and chief economist at Fannie Mae, said the country's current economic momen- tum played a role in January's more upbeat views of the housing market. "Consumers are as positive about their personal finances at the start of 2015 as they have been since we launched the National Housing Survey in 2010, and this optimism seems to be spilling over into housing market attitudes," Duncan said. "These results are in line with lender optimism about future growth in their mortgage origination business, as shown in our Mortgage Lender Sentiment Survey." The share of respondents in Fannie Mae's survey who said their household income is "signifi- cantly higher" than it was a year ago climbed 4 percentage points to a survey high of 29 percent, the company reported. Looking ahead, 48 percent said they expect their fi- nances to improve in the next year, also a survey high. Overall, 44 percent of Americans said they believe the economy is on the right track, an increase of 3 percentage points and only a few points less than those saying the economy is headed the wrong way (49 percent). That optimism spurred 66 per- cent of those surveyed to say they would buy a home if they had to move, a jump from 61 percent at the end of 2015. The share of those who would rent, meanwhile, slipped after three months of gains, falling to 29 percent. "Overall, these are good signs to start off 2015 and are consistent with our expectation that strengthening employment and economic activity will boost the speed of the housing recovery," Duncan said. Mortgage credit availability increases in January The GSes' recently announced low down- payment programs appear to already have an effect on the market. M ortgage credit availability increased slightly in January as new loan programs opened up more doors for would-be homebuyers. The Mortgage Bankers Association (MBA) reported its Mortgage Credit Availability Index (MCAI), which analyzes data from AllRegs' Market Clarity, increased 1.8 percent to 117.8 in January. "Several new initiatives aimed at making mortgage credit more available and affordable to con- sumers were recently announced and resulted in a net loosening of credit over the month," said MBA Chief Economist Mike Fratantoni, pointing to the introduction of new low down-payment programs by Fannie Mae and Freddie Mac and last month's cut in annual mortgage insurance premiums by the Federal Housing Administration (FHA). Since the first announcement, roughly 40 percent of investors have begun to offer versions of Fannie Mae's high loan-to-value ratio program, Fratantoni said. Freddie Mac's program will launch formally in March. Since the FHA premium cuts impact mortgage affordability, Fratantoni added that he doesn't expect the change will have a major impact on the index. All of the component indices measured by MBA increased month-over-month, with the gauge of conventional loan avail- ability climbing 3 percent and the government index rising 0.9 percent. MBA also introduced two new components this month: the con- forming mortgage index, which rose 1.8 percent in January, and the jumbo index, which was up 1.9 percent. "Growth in the jumbo loan market over the last few years has been a consistent and ongoing trend—with evidence of expansion on both the supply and demand sides of the market," Fratantoni said. "These new component indices allow us to more precisely measure how credit availability is changing with regards to jumbo loan programs and their conform- ing (non-jumbo) counterparts." "overall, these are good signs to start off 2015 and are consistent with our expectation that strengthening employment and economic activity will boost the speed of the housing recovery." — Doug Duncan, Fannie Mae 340-397_MW_DSNews_FNL.indd