The gap between Americans who think it is a good time to buy a house and those who feel it is a good time to sell narrowed by six percentage points in July. This could indicate, Fannie Mae said today, a better balance between supply and demand. Of respondents participating in the company's National Housing Survey, 67 percent thought it was a good time to buy, down from 70 percent in June, while those viewing it as a good time to sell rose from 40 to 43 percent.
In addition, the share of consumers who say their home has increased in value since they bought it rose to an all-time survey high, which suggests a long-term positive trend for household balance sheets that may encourage more potential buyers and sellers to enter the market.
Americans' attitudes toward the housing market remain mixed, Fannie Mae said. Answers to the survey indicating a steady improvement in respondents' personal financial outlook may bode well for housing over the coming months. The percentage who say their income has improved over the last 12 months jumped up four percentage points to 28 from June to July while the number who expect an increase over the next 12 months remains in the low 40 percent range where it has been for at least a year.
Consumer attitudes about the economy as a whole however are growing more negative. The share of respondents who believe the economy is on the wrong track increased by 5 percentage points from last month to 59 percent.
"The continued cautious sentiment expressed across the range of consumer indicators this month gives weight to our view that the first phase of the housing recovery is decelerating, and 2014 will be a year of mixed housing outcomes with home prices rising more slowly and home sales falling slightly," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "We have always believed that for the housing recovery to be considered robust, we will need strong and sustained full-time job and income growth. Recent data indicating the creation of more than 200,000 jobs over each of the last six months, combined with this month's improvement in the share of consumers reporting significantly higher household income than a year ago, does provide some reason for optimism. If these trends continue, they could lead to some upside in housing in 2015."
The share of respondents who expect an increase in home prices over the next 12 months fell again by 3 points and is now at 42 percent and the average expectations for the increase fell to 2.3 percent from 2.4 percent. The share who say home prices will go down also decreased-to 8 percent.
The percentage of respondents who expect rents to rise fell from 54 to 51 percent and the average 12 month price change expectation took a big drop, from 4.3 to 3.8 percent.
The Fannie Mae National Housing Survey polls 1,000 Americans via a live telephone interview each month 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. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts. Findings are compared to the same survey conducted monthly beginning June 2010.