The April edition of Fannie Mae's National Housing Survey revealed increasing optimism in American attitudes toward both housing and the overall economy. Virtually every positive indicator in the survey ticked upward.
More than half of survey respondents now expect home prices to climb within the next 12 months. Fifty-one percent said they expected such improvement, up 3 percentage points from March and 19 points higher than in April 2012. Expectations of how large that increase will be remained at an average of 2.7 percent for the second month in a row.
The percentage of respondents who feel now is a good time to buy remained at 71 percent. That number has moved in a tight one-to-two point range over the last year. However, the percentage of those who feel that now is a good time to sell jumped 4 percentage points in April to 30 percent compared to 15 percent one year ago. This may be the best news coming out of the survey as recent market data suggest that five out of eight people who buy a home first have to sell and many experts feel potential sellers have been waiting for a better market. This has contributed to tight inventories and possibly delayed the housing recovery in many areas.
"For the first time in the survey's three-year history, the majority of Americans surveyed now expect home prices to increase," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "Crossing the 50 percent threshold marks a significant milestone as most Americans believe a housing recovery is truly occurring throughout the country. Reflecting that increased optimism toward housing, the share of Americans who think it is a good time to sell has doubled during the last year. Many homeowners who have been underwater are gradually returning to positive equity, and selling is now becoming an available and attractive option again."
The share of respondents who say mortgage rates will go up fell 3 percentage points to 43 percent, while those who say they will go down increased slightly to 7 percent.
The percentage of survey respondents who expect rental prices to increase over the next 12 months dropped from 50 to 48 percent month over month. The average expectation for increases among those who expect rents to rise was unchanged at 4.1 percent.
The share of respondents who said they would buy if they were going to move increased slightly to 65 percent.
When asked about the overall economy 39 percent said it was on the right track, an increase of 4 percentage points. Wrong track answers dropped 2 percentage points to 56 percent.
The number of persons who felt their personal financial situation would worsen over the next year dropped 5 points to 16 while both the percentage expecting improvement and expecting no change rose from 39 to 43 percent and 38 to 41 percent respectively.
Twenty percent of respondents say their household income is significantly higher than it was 12 months ago, holding steady from last month and eleven percent reported significantly lower household expenses compared to 12 months ago, a 3 percentage point increase over March.
The National Housing Survey is conducted by phone among a rolling panel of 1001 respondents. Both renters and homeowners are included in the group which are asked more than 100 questions on their attitudes toward home ownership and renting, homeownership distress, personal finances, and consumer confidence. The survey has been conducted since 2010.