Americans maintained a cautious but improving outlook on the housing market and homeownership. In August, more people said it’s a good time to sell, and more expect housing prices to rise over the next year.
However, Fannie Mae says stalling household financial expectations and declining economic optimism likely mean the housing market recovery rate will remain tempered.
“Consumer attitudes toward the housing market remain modestly positive, despite signs of increased concern over the direction of the economy,” says Doug Duncan, senior vice president and chief economist of Fannie Mae.
Survey respondents expect home prices to increase 1.6 percent in the next year, on average, down slightly from the high of 2.0 percent in June. The number of respondents who expect home prices to decline totaled 11 percent – the lowest level since the survey began in June 2010.
Eighteen percent say it’s a good time to sell, marking the highest level since the survey’s inception. Regarding mortgage rates, 40 percent expect a rise in the next 12 months, an increase of 4 percentage points over July.
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 percent, the third consecutive rise and the highest reading since January. Those who expect their financial situation to worsen dipped to 13 percent, while those expecting their situation to remain the same increased modestly to 41 percent.
Survey highlights
Homeownership and renting
• Average home price change expectation is 1.6 percent, largely consistent with last month and down from a June high of 2.0 percent.
• 11 percent say home prices will go down in the next year, holding steady at the lowest level since the survey’s inception in June 2010.
• At 40 percent, the percentage of respondents who say mortgage rates will go up in the next 12 months has increased by 4 percentage points since July.
• 18 percent of respondents say it is a good time to sell, the highest level since the survey’s inception.
• The percentage of respondents who say it is a good time to buy has remained steady at 73 percent.
• 44 percent say home rental prices will go up in the next year, a decrease of 3 percentage points, while 5 percent expect them to go down.
• The average rental price change expectation decreased 0.7 percent from last month to 3.2 percent, the lowest level since January 2012.
• The percentage of respondents who say they would buy if they were going to move increased slightly to 67 percent, while 28 percent would rent.
The economy and household finances
• Consumer optimism continues to wane, with 33 percent saying the economy is on the right track, a slight decrease from last month and 5 percentage points lower than the May 2012 peak.
• The percentage of respondents who expect their personal financial situation to get worse fell slightly to 13 percent, while those expecting their personal financial situation to stay the same increased slightly to 41 percent.
• The share of respondents who say their household income is significantly higher than it was 12 months ago remained steady at 20 percent, while those who say it is significantly lower increased slightly to 16 percent.
• Fifty-six percent of those surveyed say their household expenses are about the same as they were a year ago, a slight decrease over July.
© 2012 Florida Realtors®
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