Consumers expect higher rent and lean more toward homeownership: Fannie Mae
Americans are showing more signs of confidence in the housing market at least in terms of home prices, Fannie Mae said in its October National Housing Survey. Of course, it also doesn't hurt that rents are expected to rise into next year.
The Fannie economics research team interviewed approximately 1,000 Americans to reach its findings.
50% of those interviewed expect home rental prices to rise in the next 12 months. Household expenses at U.S. homes remained stable, according to the study. About 56% of those who answered surveyed questions noticed consistent income within the past 12 months.
With Americans more optimistic about prices and rental price expectations going higher, Fannie Mae says more consumers may be motivated to acquire homes in the coming months.
While the government-sponsored enterprise is seeing signs of optimism around housing, it still is calling for a slow recovery, rather than a quick pick-up in housing spend.
"This has been a year of steady growth in the percentage of consumers with positive home price expectations," said Doug Duncan, senior vice president and chief economist of Fannie Mae. "Increasing household formation, encouraged by an improving labor market, is adding additional momentum to the housing recovery and putting upward pressure on rental price expectations. Expected increases in both owning and renting costs may encourage more consumers to buy and add further strength to the housing recovery already under way."
Even with optimism up around housing, only 38% of respondents believe the economy is on the right track. And those who believe it's on the wrong track grew to 56% of all of those surveyed. Only 43% of consumers expect their financial situations to get better within the next year.
Still, 72% of respondents believe now is a good time to buy a home, while 18% say it’s a good time to sell. The average rental price is up 0.8%, reaching 3.9%, which is equal to July 2012 levels.