Fannie Mae said today that results of its monthly National Housing Survey shows that Americans are aware of and following trends in the housing market. The outlook toward housing growth voiced by survey respondents has generally moved upward since the beginning of the year but now appears to have plateaued, perhaps due to concerns over the potential tapering of the Federal Reserve’s asset purchases.
“The spike in mortgage rates associated with the possibility that the Fed will begin to wind down its asset purchase program later this month has dampened the improving trend in consumer sentiment regarding housing witnessed in our survey since the start of this year,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The pause in positive momentum is consistent with slowing trends in home purchase contract signings and mortgage applications. Interest rate volatility will likely remain elevated, even after we have more clarity on the pace of the Fed’s tapering, due to concerns over the upcoming budget and debt ceiling debates as well as the crisis in Syria.”
A majority of survey respondents still expect home prices to increase over the next 12 months and that number increased 2 percentage points from July to 55 percent but is below early summer responses. The pace at which respondents expect price to rise dropped to 3.4 percent from 3.9 percent in July.
Additionally, the share of Americans who say it is a good time to buy a home has stayed relatively flat during the past year and decreased 3 percentage points in August. Those who say it is a good time to sell increased fairly steadily since the first of the year but fell 4 percentage points to 36 percent in August.
Americans have a similar view about rental prices. The number of respondents who expect rents to continue to increase, while still a majority, fell slightly in August (from 54 to 53 percent) as did the rate at which they expect those rents to go up, dipping from 4.2 percent to 4.1 percent.
Expectations about mortgage rates leveled off a bit with 60 percent expecting further increases – down from 62 percent – while those who feel rates have stabilized rose from 28 percent to 31 percent. Forty-six percent of respondents feel it would be easy for them to get a home mortgage today while 53 percent view it as a difficult proposition. Both views were up 1 percentage point from July.
At 37 percent, the share of respondents who say the economy is on the right track decreased 3 percentage points from July but there was a one point increase in persons who expect their own financial situation to improve over the next 12 months and a 3 month drop in those who expect it to get worse.
The National Housing Survey is conducted every month by telephone among 1,001 Americans including persons who own their homes with a mortgage and without a mortgage and persons who rent. The survey is designed to assess attitudes toward owning and renting a home, home and rental price changes, homeownership distress, the economy, household finances, and overall consumer confidence.
SOURCE: www.mortgagenewsdaily.com
