Consumer sentiment regarding the housing market continues its modestly positive trend, according to the latest data from Fannie Mae’s National Housing Survey. Supported by the expectation that home prices will rise in the next year and more people saying it is a good time to sell, Americans have maintained a cautious but improving view of the housing market and home ownership.
However, their stalling household financial expectations and declining economic optimism will likely mean the rate at which the housing market recovers will remain tempered.
“Consumer attitudes toward the housing market remain modestly positive, despite signs of increased concern over the direction of the economy,” said Doug Duncan, senior vice president and chief economist of Fannie Mae. “While the latest results showed a pickup in the share of consumers expecting mortgage rates to rise, reflecting the uptrend of long-term interest rates since mid-July, that may soon change. Friday’s disappointing jobs report underpins the gradual nature of this year’s housing recovery and supports our view that the muted economic recovery is still subject to downside risk and that additional Fed easing will soon be forthcoming.”
Survey respondents expect home prices to increase 1.6% in the next year and the number of respondents who say home prices will decline totaled 11%, the lowest level since the survey began in June 2010.
Eighteen percent say now is a good time to sell, marking the highest level since the survey’s inception.
Meanwhile, the survey showed increasing consumer pessimism about the direction of the overall economy.
The number of respondents who believe the economy is headed in the wrong direction ticked up 2 percentage points to 60%, the third consecutive rise to the highest reading since January. Those who expect their financial situation to worsen dipped to 13%, while those expecting their situation to remain the same increased modestly to 41%.
- 73% say it is a good time to buy.
- 44% say home rental prices will go up in the next year, while 5% expect them to go down.
- 67% say they’d buy if they were going to move, while 28% would rent.
- 20% say their household income is significantly higher than it was 12 months ago and 16% say it’s significantly lower.
- 56% say their household expenses are about the same as they were a year ago.
Source: Fannie Mae