Fannie Mae said today that an improvement in American's attitudes about the ease of getting a mortgage may offset a declining perception about home prices, allowing for continued if measured improvement in the housing recovery. Results from the January National Housing survey showed a 2 percentage point gain in how easy Americans through it would be to obtain a mortgage to a survey high of 52 percent while the numbers who thought it would be difficult to get a mortgage dropped 3 points to 45 percent.
At the same time fewer Americans expect home prices to continue their recent meteoric rise and those who do expect prices to continue up have moderated their expectations over the degree. The share of people who say home prices will stay the same in the next 12 months increased 7 percentage points to 45 percent, while the share who say home prices will go up in the next 12 months fell by 6 percentage points to 43 percent. Those who expect a price rise now say it will be 2.0 percent over the next 12 months, down from over 3 percent in December.
The share of survey respondents who feel it is a good time to buy a house dropped from 67 percent in December to 65 percent while those who view it as a good time to sell jumped 5 points to 38 percent. Seventy percent say they would buy if they were going to move, an all-time survey high, while those who would rent hit an all-time low of 26 percent.
There was also a big change in right track/wrong track answers. The share of respondents who think the economy is on the right track increased 8 percentage points to 39 percent while the wrong track share declined from 59 to 54 percent. This was the closest the two numbers have come to each other since August and September 2013 when the wrong track/right track numbers were 57 and 37 respectively. Additionally, the share who expect their personal financial situation to improve in the next year increased to 44 percent, continuing an upward trend since November 2013.
"A majority of consumers now believe that it is getting easier to get a mortgage. For the first time in the National Housing Survey's three-and-a-half-year history, the share of respondents who said it is easy to get a mortgage surpassed the 50-percent mark, exceeding those who said it would be difficult by 7 percentage points," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "The gradual upward trend in this indicator during the last few months bodes well for the housing recovery and may be contributing to this month's increase in consumers' intention to buy rather than rent their next home. The dip in overall home price expectations, though notable, is consistent with our view of moderating home price gains this year from a robust pace last year, while positive trends in perceptions about the economy and personal finances over the next year support our view of stronger growth in the broader economy."
Rents are expected to increase over the next year by 48 percent of those surveyed, down 5 points from December. The average rental increase was 2.8 percent, a full point lower than last month and tied for the survey low.
The National Housing Survey is conducted by telephone every month with.1.000 Americans, both homeowners and renters. The survey panel is asked more than 100 questions about their attitudes toward owning a home, renting, homeownership distress, the economy, and overall consumer confidence. The January survey was conducted between January 1 and January 21, 2014.