The percentage of consumers believing the economy is on the right track finally crossed paths with those who say the economy is on the wrong track in the February edition of Fannie Mae's National Housing Survey. The share of respondents who believe the economy is headed in the right direction increased 3 percentage points to a survey high of 47 percent while the share who believe it is headed in the wrong direction decreased 4 points to 45 percent, an all-time survey low.
Doug Duncan, senior vice president and chief economist at Fannie Mae said, "Continuing improvements in consumer attitudes in this month's National Housing Survey lend support to our expectation that 2015 will be a year of the economy dragging housing upward," said. "The share of consumers who think the economy is on the right track rose to a record high since the inception of the survey nearly five years ago and for the first time exceeded the share who believe it's on the wrong track. Consumer confidence seems to be getting a boost from employment growth. This is reflected in their views on the ease of getting a mortgage today, which also reached a survey high in February. We continue to see strength in attitudes about the current home buying and selling environment and consistently high shares of consumers saying they expect to buy a home on their next move. At the same time, we still need to see further growth in consumer optimism toward personal finances and income for more robust improvement in housing market attitudes."
Those who say it is a good time to buy a home remained at 67 percent although those who view it as a good time to sell fell from 44 to 40 percent. Forty-six percent of respondents expect further price increases with the average 12-month increase estimated at 2.5 percent. Last month 49 percent were looking for an increase although the expectation then was also for 2.5 percent annual appreciation. Those expecting a drop in prices fell from 8 percent to 6.
The share of respondents who believe it would be easy to get a home mortgage today increased to a record-high 54 percent. Forty-three percent, a survey low, think it would be difficult to get a mortgage. Those consumers who expect to pay more for a mortgage increased by 3 points to 48 percent while 40 percent expect interest rates to decrease over the next 12 months compared to 41 percent in January.
Rising rates and difficulties getting a mortgage aside, consumers remain bullish on home ownership. Sixty-five percent say they plan to buy the next property in which they reside compared to only 29 percent who say they will rent.
Slightly more than half (52 percent) said that rental prices will increase over the next 12 months, unchanged from January, but the average increase expected jumped from 3.6 to 4.0 percent.
While their optimism about the economy as a whole is up, respondent attitudes toward personal finances fell in February. Forty-six percent anticipated an improvement in their personal financial situations over the next year, down from 48 percent, but there was also a slight decrease in the already small share who expect it to worsen. The slack was taken up by a 3 point increase (to 42 percent) in those who expect no change. Twenty-four percent report significantly higher household income than a year earlier, down 5 percentage points, while 31 percent report significantly higher household expenses, down from 35 percent in the previous survey.
Fannie Mae's National Housing Survey polls 1,000 Americans via live telephone interview each month. The respondents, composed of both homeowners and renters, are asked more than 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 survey began in June 2010.