Fannie Mae said today that results of its December National Housing Survey show that the housing recovery is on firm footing and consumer housing sentiment has bounced back from an autumn dip.
Forty-nine percent of consumers expect that home prices will increase over the next 12 months where only 43 percent held such expectations in December 2012. Among those who expect an increase, the average is a 3.2 percent rise in value compared to average expectations of 2.6 percent last year and 2.5 percent only one month earlier.
There was a big increase year-over-year of those who view the present as a good time to sell a house. Those responses rose from 21 percent in December 2012 to 33 percent in the recent survey. Those who view it as a good time to buy also rose 3 percentage points to 67 percent from November to December although the number had declined from 70 percent a year earlier.
Despite rising interest rates in recent months, slightly fewer consumers expect even higher rates over the next 12 months. They are also more optimistic about their access to mortgage credit than they were a year ago, with those who say that it would be easy to get a home mortgage today rising to 50 percent, compared to 45 percent last year.
"The marked improvement in housing market sentiment over the course of 2013 bore out our view going into the year that the housing recovery was on a firm footing. Year-over-year gains in home price expectations and attitudes about the current selling environment were particularly notable," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "Going into 2014, housing attitudes are recovering from a recent dip that coincided with the heated fiscal discussions between the Administration and Congress late last year. Consumer attitudes about the ease of getting a mortgage today are at their highest level in the survey's three-and-a-half-year history, which should help offset the current higher interest rate environment and support a continued but measured housing recovery as we move through 2014."
After leveling off over the last half year the percentage of respondents who expect rents to increase over the next 12 months jumped 3 percentage points to 53 percent compared to November while the average expectation for rent increases soared a full point to 3.8 percent.
When asked about the economy in general and their own personal financial situation, 31 percent of respondents said the economy is on the right track, down slightly from last month. The percentage of respondents who expect their personal financial situation to improve over the next 12 months increased four points to 42 percent and 23 percent said their household income is already higher than the year before. Those who say household expenses have increased over the last year fell from 33 percent in November to 30 percent in December.
The National Housing Survey is conducted each month by telephone among a panel of over 1000 respondents, both homeowners and renters. They are asked over 100 questions to assess their attitudes toward owning and renting a home, home and rental price changes, homeownership distress, the economy, household finances, and overall consumer confidence. The December survey was conducted between December 1, 2013 and December 16, 2013.
