March 8, 2013 2:58 am
“Despite fiscal headwinds and political uncertainty, consumer sentiment toward housing is robust and continues to gather strength,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “We expect home prices to firm further amid a durable housing recovery, gradually reducing the population of underwater borrowers and helping to boost the share of consumers who say that now is a good time to sell."
“Since reaching its trough last September, the share of consumers expecting mortgage rates to rise has trended up,” continued Duncan. “However, despite historically low mortgage rates, nearly half of borrowers have never refinanced their mortgage. Combined with the scheduled year-end HARP deadline, rising rate expectations should prompt some borrowers to refinance soon to take advantage of more favorable mortgage terms and add to their disposable income, helping to offset ongoing fiscal drag.”
Homeownership and Renting
The average 12-month home price change expectation increased 0.5 percent over last month to 2.9 percent, the highest level since the survey’s inception.
At 48 percent, the share who believe home prices will go up in the next 12 months also reached a survey high, while the share who believe home prices will go down held steady at the survey low of 10 percent.
The percentage who think mortgage rates will go up increased by 4 percentage points to 45 percent, the highest level since August 2011, while those who think they will go down held steady at 7 percent.
Twenty-five percent of respondents say it is a good time to sell a house, the highest level since the survey’s inception in June 2010.
At 3.9 percent, the average 12-month rental price change expectation increased 0.2 percent over January.
Fifty percent of those surveyed say home prices will go up in the next 12 months, holding steady from January at the highest level since the survey’s inception.
The share of respondents who said they would buy if they were going to move increased by 2 percentage points to 67 percent.
The Economy and Household Finances
At 38 percent, the share of respondents who say the economy is on the right track has held steady over the past three months.
The percentage who expect their personal financial situation to get better over the next 12 months fell by 2 percentage points to 41 percent.
Twenty-one percent of respondents say their household income is significantly higher than it was 12 months ago, a 2 percentage point decrease from last month.
Thirty-one percent report significantly higher household expenses compared to 12 months ago, a 7 percentage point decrease and the lowest level since June 2010.
Source: Fannie Mae
Published with permission from RISMedia.