Consumers appear to take for granted
that mortgage interest rates are going to rise. Only 5 percent of
respondents to the July National Housing Survey expect rates to
decline over the next year while 62 percent now believe they will
rise, an increase of 5 percentage points from June and the highest
level in the survey's three-year history. Nonetheless, 74 percent of
those questioned in the Fannie Mae sponsored survey think it is a
good time to buy a house while those thinking it is a good time to
sell rose to 40 percent after dropping from that same survey high
level in May to 36 percent in June.
Fannie Mae said that overall consumer
attitudes toward the housing market are increasingly positive.
Consumers expect home prices to climb an average of 3.9 percent over
the next 12 months even though those expecting any increase fell by
4 percentage points from the June survey high of 57 percent. Those
expecting a decline in prices set a new survey low at 6 percent.
"Consumers have taken the interest rate rise in stride.
Expectations for continued improvement in housing persist, and
sentiment toward the current buying and selling environment is back
on track from its dip last month," said Doug Duncan, senior vice
president and chief economist at Fannie Mae. "These results are
consistent with our own analysis of previous housing cycles, which
finds that interest rates and home prices are not strongly
Respondents do expect some relief for renters. Fewer expect rents
to increase over the next 12 months, dropping from 56 percent in June
to 54 percent, and the average rent increase anticipated fell to 4.21
percent from 4.6 percent.
Americans are slightly less upbeat about
home ownership, however. Only 45 percent feel it would be easy for
them to obtain a home mortgage, down 2 percentage points, and there
was a slight decrease to 64 percent of those who indicated they would
buy if they were going to move.
Three percent fewer people expect their personal financial
situation to improve over the next year but the percentage of those
reporting significantly higher household expenses fell from 36
percent to 30 percent.
Fannie Mae's survey is conducted monthly by phone with 1,000
homeowners and renters to assess their attitudes toward owning and/or
renting a home, the economy, personal finances, and overall consumer
confidence. The survey has been conducted monthly since June 2010
and the most recent round of questions took place between July 1 and