Americans responding to the Fannie Mae's September edition of its National Housing Survey displayed greater optimism about the housing market, homeownership, and the country's economy in general. Fannie Mae said that there has been a gradual improvement in attitudes about housing over the last few months but consumer attitudes about the economy as a whole improved substantially in the most recent survey, "breaking the progression of waning confidence seen during much of this year."
"Consumers are showing increasing faith in the nascent housing recovery," said Doug Duncan, senior vice president and chief economist of Fannie Mae. "Home price change expectations have remained positive for 11 straight months, and the share expecting home price declines has stabilized at a survey low of only 11 percent. Furthermore, the Federal Reserve's latest round of quantitative easing has caused a large drop in mortgage rate expectations. Friday's September jobs report, including the strong upward revisions for prior months, a sizable increase in earnings, and a sharp decline in the unemployment rate, should provide further impetus for improving consumer confidence in the housing market."
Fannie Mae's survey polls 1,000 individuals by phone each month. The survey includes homeowners with and without a mortgage on their homes and renters. Respondents are asked more than 100 questions which are used to track attitudinal shifts. The survey has been conducted since June 2010,
The percentage of respondents who expect home prices to rise over the next year is now at 37 percent, up from 18 percent one year ago and the highest level in the survey's short history. Only 11 percent think prices will experience further declines. The average increase expected by respondents is 1.5 percent, down slightly from each of the previous two months but the 11th straight month that price change expectations have been in positive territory.
Half of respondents expect mortgage rates to remain unchanged over the next 12 months - an increase of 3 percentage points from August while the percentage expecting rates to rise declined from 40 to 33 percent.
Seventy-two percent of respondents view this as a good time to buy a home, a number that has risen only four points over the last year. However, the percentage who view the present as a good time to sell has risen 9 points to 19 percent in the same time frame. Tying the June 2012 level for the all-time high, 69 percent of participants said they would buy if they were going to move.
Rental prices are expected to increase by 47 percent of those responding with an average increase of 3.1 percent. Price increase expectations have moderated a bit since early summer when respondents were looking for increases averaging 3.9 percent.
Consumer confidence was way up; 41 percent now believe the economy is on the right track, up from 33 percent last month. The percent who believe the direction is wrong dropped from 60 percent to 53 percent. These are, respectively, the highest and lowest readings in the survey's history.
When it came to personal financing, 44 percent responded that they expected their own situation to improve over the next year, up from 42 percent the previous month. At the same time, the percentage that reported they actually had a higher household income than one year earlier declined from 20 percent to 17 percent and the percent saying their household expenses are higher than a year ago rose 2 percent to 34 percent month-over-month.