Fannie Mae’s Home Purchase Sentiment Index measures Americans’ perceptions of the housing market, including whether they feel it’s a good time to buy or sell a house and their expectations for home prices and mortgage rates over the next year. In September, the Index found consumers are more secure in their jobs and more likely to feel now is a good time to enter the market. “The HPSI returned near its record high this month, driven primarily by improvement in attitudes about selling a home and strengthening home prices,” Doug Duncan, Fannie Mae’s senior vice president and chief economist, said. “With consumers’ expectations for rental price increases continuing to outpace their expectations for home price growth, many consumers may view homeownership as a more attractive option.” In fact, 64 percent of respondents said they felt like it was a good time to buy a house. Also in the report, the vast majority of Americans say they don’t fear losing their job and nearly a third reported that their household income has gone up significantly over the past year. The combination of increasing financial security and an attractive environment for potential home buyers and sellers indicates that the housing market should see continuing gains in the months ahead. More here.

According to the Mortgage Bankers Association’s Weekly Applications Survey, average mortgage rates dropped last week to their lowest level since May. Rates were down across all loan categories, including 30-year fixed-rate loans with both conforming and jumbo balances, loans backed by the Federal Housing Administration, and 15-year fixed-rate mortgages. Demand for mortgage applications surged in response to the drop. In fact, refinance activity was up 24 percent from one week earlier and purchase application demand – which is a good indicator of future home sales – rose 27 percent. Purchase applications are now 49 percent higher than they were during the same week one year ago – which is a positive sign after recent data seemed to show home sales beginning to slow following a strong summer. Lynn Fisher, MBA’s vice president of research and economics, said there were multiple factors that led to the surge in demand. “The number of applications for purchase and refinance mortgages soared last week due both to renewed rate volatility and as many applications were filed prior to the TILA-RESPA regulatory change,” Fisher said. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.

Since 2004, the homeownership rate has declined from its all-time high of 69.2 percent to 63.4 percent as of the second quarter of this year. And, though the percentage of Americans who own their own home has declined among all age groups, the number of Millennial homeowners is particularly low. Millennials – typically defined as those between the ages of 18 and 34 – have been slow to enter the housing market and many analysts believe it is one of the chief reasons residential real estate has been slow to recover since the housing crash. And though there has been a spike in home sales this year and an increasing number of first-time buyers active in the market, their numbers remain low compared to historical averages. Sean Becketti, Freddie Mac’s chief economist, says student loan debt plays a role but isn’t solely responsible for the lower-than-normal number of young Americans buying homes. “The low homeownership rate among Millennials is still something of a puzzle,” Becketti said. “However, student debt plays a role – higher balances are associated with a lower probability of homeownership at every level of college and graduate education.” But while student loan debt has tripled over the past 10 years, the rate of homeownership among Americans with student loans was just one percent lower than the rate of those without student loans, indicating debt isn’t the only thing holding young buyers back. More here.

Fannie Mae’s quarterly Mortgage Lender Sentiment Survey polls senior executives to assess their views and outlook on a number of topics related to the mortgage market. The results provide an insider’s perspective on credit standards, demand, the economy, and more. According to the most recent survey, when asked whether their lending organization’s credit standards have eased, tightened, or remained unchanged over the past three months, the gap between those saying they’ve eased and those reporting stricter standards increased to 20 percent, a new survey high. Doug Duncan, senior vice president and chief economist at Fannie Mae, said it was the first time in seven quarters that there was a pronounced increase in the share of lenders reporting on net an easing of credit standards. “This is a significant result in light of public discourse on credit availability and standards,” Duncan said. “Overall, we expect that lenders’ tendency toward easing credit standards, together with relatively low mortgage rates and a strengthening labor market, will continue to support the housing market expansion.” More here.

Continuing home price increases and rumors of mortgage rate hikes have the combined effect of convincing many potential home buyers that affordability conditions have worsened this year. But, according to a new analysis from RealtyTrac and Clear Capital, buying a home was actually at its most affordable level in two years during the first quarter of 2015. The analysis looked at weekly wage data from the Bureau of Labor Statistics, average prices for single-family homes and condos, and average interest rates on 30-year fixed-rate mortgages. The results show that – though home price appreciation outpaced average wage growth between the first quarter of 2014 and the first quarter of 2015 in 68 percent of the analyzed counties – average interest rates dropped at the same time. Because of this, buying a home required a smaller share of the average wage compared to a year earlier in 339 of the 582 counties included in the analysis. Daren Blomquist, RealtyTrac’s vice president, says the results were surprising. “Although home prices continue to outpace wage growth in the majority of local markets, this analysis somewhat surprisingly shows that affordability is actually improving in most markets thanks to falling interest rates and slowing home price growth, which is allowing wage growth to catch up in some markets,” Blomquist said. “At the national level, buying an average-priced home in the first quarter of 2015 was the most affordable it’s been in two years and nearly twice as affordable as it was in the second quarter of 2006 – when affordability was its worst in the past 10 years.” More here.

According to the Mortgage Bankers Association’s Weekly Applications Survey, demand for mortgage purchase applications is now 20 percent higher than it was at the same time last year. Rising application demand is evidence that more Americans are interested in buying a home and have begun the mortgage process. But, despite the improvement over last year, the survey’s results also show that, when compared to one week earlier, overall demand has dropped. In fact, refinance activity was down 8 percent and purchase demand dropped 6 percent. The slowdown follows a recent spike in activity and comes on a week when average mortgage rates fell. According to the report, the average contract interest rate for 30-year fixed-rate mortgages with both conforming and jumbo balances dropped from the week before, as did rates for loans backed by the Federal Housing Administration and 15-year fixed-rate mortgages. Michael Fratantoni, MBA’s chief economist, told CNBC the weekly average mortgage rate isn’t telling the whole story. “The prior week included days with much lower rates due to volatility around the Fed’s announcement that drove refinance volume up,” Fratantoni said. “Last week, a more stable rate produced less volume, as rates at this level just do not provide an incentive for most homeowners to refinance.” The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.