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Homebuying sentiment finishes 2015 on upbeat note

Thanks, in part, to Americans being in a better position to pay off their mortgages, home purchase sentiment recently climbed to a year-long peak, according to newly released polling data from Fannie Mae.

Home purchase sentiment in December reached 83.2 on Fannie Mae's HPSI, the lending giant reported. That's up nearly 2.5 percent from November, closing out a year that turned out to be the strongest in the measure's history.

The improved buyer sentiment derived mainly from Americans making more money today than they were 12 months ago. Nearly 10 percent of respondents said their income levels rose in the past year, the poll found. Additionally, fewer people indicated they were concerned about losing their job, down 3 percent on net during the closing month of 2015.

Stronger earnings positively affecting attitudes
Doug Duncan, Fannie Mae vice president and chief economist, indicated that economically speaking, the average American entered 2016 with relative optimism about what to expect in the days and months ahead.

"Consumers ended the year on an improved note with regard to their income, job security, and overall economic outlook," Duncan explained. "This more positive consumer sentiment brought the HPSI up a few points, moving the index up for all of 2015."

He added that should Americans' upbeat attitude continue, homeownership demand will likely remain vibrant. The one caveat to this development is what single-family homes are going for on the for-sale market. High asking prices have served as a deterrent for buyers operating on a budget, and this will be more apparent in 2016 if the pace at which prices are rising intensifies.

An overwhelming majority of Americans believe the current market conditions are ideal for buying. However, many are uncertain about the ease with which they can secure a mortgage. Nearly two-thirds think it would be hard to get a loan were they interested in buying residential real estate, according to a separate poll conducted by the National Association of Realtors. At the same time, though, 51 percent making $50,000 or more per year admit that they haven't tried.

December dip in mortgage credit availability attributable to technical flaw
Mortgage credit availability, since 2012, has maintained a fairly steady track higher. Recently, however, it's slipped several percentage points. In December, for instance, the measure reached 124.3 on the Mortgage Bankers Association's Credit Availability Index, down 2.4 percent from November.

Lynn Fisher, MBA's vice president of research and economics, noted that while this suggest a tightening of lending standards, there's more than meets the eye to the slippage.

"A large part of the decline was driven by a technical issue related to implementation of affordable, low down payment, loan programs," Fisher explained. "Many investors discontinued existing low down payment loan programs only to replace them with new iterations of similar programs that were discontinued.

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