According to the Zillow Housing Confidence Index, more than 4 million first-time buyers want to purchase a home in 2014. The index measures consumer sentiment, with anything over 50 indicating a positive sentiment. The national index was 63.7, with 5 percent of respondents saying they wanted to buy a home in the next year. If every respondent actually purchased a home, Zillow predicts new home sales would total more than 4.2 million for 2014. However, tough market conditions may limit home sales.
Home inventory, although up 11 percent from a year ago, is still well below optimal levels, and has fallen year-over-year in 8 of the 20 metros measured. Mortgage rates, once a record low 3.3 percent in 2013, have risen to 4.2 percent according to the Zillow Mortgage Marketplace. Curiously, Miami, Atlanta, and Las Vegas, metros that were some of the hardest hit by the housing crisis, had some of the highest interest in purchasing a new home. The top five metros for positive consumer sentiment were San Jose, Miami, San Diego, Phoenix, and San Francisco.
Last week's improved although far from impressive jobs report brought a little bit of comfort to the financial markets, pushing mortgage rates up for the week. According to Freddie Mac's Primary Mortgage Market Survey, the average rate for a 30-year fixed-rate mortgage came up nearly a tenth of a percentage point to 4.37 percent for the week ending March 13. Last year, the 30-year FRM averaged 3.63 percent. The 15-year fixed average was 3.38 percent, up from 3.32 percent last week. Despite the gain, analysts still blame cold weather for the minimal increase in mortgage rates.