The majority of data from the January Fannie Mae National Housing Survey released today indicates that Americans are increasingly confident in the trajectory of both the economy and the housing market. The percent of survey respondents who think it is a good time to sell a home continued to climb; reaching 23 percent last month compared to 11 percent the same time last year. The percentage who thinks it is a good time to buy has inched down 2 percentage points to 69 over the last three months.
Only 10 percent of respondents expect home prices to decline further compared to 11 percent in December while 41 percent expect price increases in the next 12 months and 45 percent expect no changes. The average 12-month home price change expectation fell slightly from last month’s survey high to 2.4 percent. The percentage of those surveyed who think mortgage rates will go up decreased by 3 percentage points to 41 percent, while those who think they will go down dipped slightly to 7 percent.
Half of the respondents expect rental prices to increase over the next year, up two points from December while 40 percent think they will drop, a two point decrease. Each of these responses had a 45 percent share in January 2011. The dimensions of expected rental hikes have dropped from an average of 4.6 percent increase in December to 3.7 percent in January.
Rising and falling home prices, interest rates, and rents seem to have little effect on the decision to buy or rent. Over the past year the percentage of homeowners who said they would buy or they would rent should they move has remained almost flat and are now at 65 percent and 30 percent respectively.
“The housing market continues to firm, with consumer home price expectations for both rental and ownership properties near the strongest levels that we’ve seen in the survey’s two-and-a-half-year history,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Concerns about job loss are waning as payrolls are growing – a trend that may give potential homebuyers more confidence that they can meet the financial obligation of homeownership. The upward trend over the past year and a half in the share of consumers who say it’s a good time to sell may reflect two related events. First, homeowners see that home prices are improving. Second, the number of homeowners who are underwater is declining, reducing a barrier for those owners who need to sell their home in order to buy a new one.”
Responses to the perennial question as to whether the economy is on the right or the wrong track continue to narrow with wrong track answers now at 53 percent compared to 54 percent in December and 61 percent in January 2011. Right Track responses which peaked at 45 percent in October before dropping sharply in November are now at 39 percent up one percentage point from December and nine from one year earlier.
The percentage of respondents who said they expected their personal financial situation to improve over the next 12 months increased by 3 points to 43 percent but has remained essentially unchanged over the last year. Nineteen percent expect deterioration their personal situation.
Twenty-three percent of respondents say their household income is significantly higher than it was 12 months ago, holding steady from last month, while 38 percent reported significantly higher household expenses. the highest level since December 2011. The percentage who are concerned they will lose their job in the next 12 months declined 1 percentage point to 19 percent, a survey low.
The National Housing Survey polls about 1,000 Americans via live telephone interview each month, asking 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 sample includes homeowners both with and without mortgages and renters. Fannie Mae has conducted the survey since June 2010.
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