By Peter Ricci
The Fannie Mae National Housing Survey for August showed a persistent level of optimism in American consumers for the housing market, despite contrary attitudes for the job market and the greater U.S. economy.
Overall, respondents to the housing survey expect home price to increase 1.6 percent over the next year, and only 11 percent think that home prices will decrease, which is the lowest level since the survey began. In addition, 18 percent think now is a good time to sell, which is the highest level since the survey began.
Fannie Mae National Housing Survey – High on Housing
More than 1,000 Americans were polled for the Fannie Mae National Housing Survey, and each were asked more than 100 questions on housing and the greater economy. Other significant findings in the housing survey included:
- Forthy percent of respondents think mortgage rates will increase in the next 12 months, an increase of 4 percentage points from July (pending action by the Fed, though, may reverse that trend).
- Seventy-three percent of respondents think now is a good time to buy, which is consistent from previous surveys.
- Consumer expectations on the rental markets declined somewhat – 44 percent think home rental prices will rise, a 3-percent-point decline, and the average rental price expectation fell by 0.7 percent to 3.2 percent, the lowest mark of 2012.
Gradual Progress Towards a Housing Recovery
Doug Duncan, the senior vice president and chief economist of Fannie Mae, said the contrary nature of the Fannie Mae National Housing Survey – that attitudes for housing increased while job numbers and other economic signs declined – suggest that the housing recovery will be a gradual one, a view that has been echoed by numerous outlets, among them the Wall Street Journal and Barron's.
“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," Duncan said. "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.”