Higher Incomes Won’t Help Homebuyers

Fannie Mae’s Home Purchase Sentiment Index showed that Americans see their incomes rising, but likely not by enough to affect homebuying power.

MarketWatch reports that the share of people reporting higher incomes than a year ago increased by three percentage points, while those reporting income decreases declined by two. The result is a net jump of five percentage points, to 24 percent, the highest percentage since June 2010.

The question is what it means for housing if people are starting to make enough money that they’re noticing a positive change in their paychecks.

In the short term, the answer is likely not much.

That’s because housing market realities remain hard, no matter the sentiment wafting through it. There’s still lean supply, and while that may be budging a bit after a few stagnant months of sales, it’s quite likely that most of what’s available is still going to be unaffordable to many American house-hunters.

Read more