The New York Times rambles, and mangles mortgages along the way

The New York Times rambles, and mangles mortgages along the way

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Fannie Mae: Americans increasingly skeptical on housing

Housing survey shows people lack economic confidence

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Consumer attitudes about the direction of the economy overall have grown more negative and Americans’ attitudes toward the housing market remain mixed, according to results from the Fannie Mae July 2014 National Housing Survey.

The share of respondents who believe the economy is on the wrong track increased by 5 percentage points from last month to 59%.

The 12-month home price change that consumers expect declined again in July, falling to 2.3%, and the share of respondents who expect home prices to climb in the next year also continued on a downward trend, falling to 42%.

“The continued cautious sentiment expressed across the range of consumer indicators this month gives weight to our view that the first phase of the housing recovery is decelerating, and 2014 will be a year of mixed housing outcomes with home prices rising more slowly and home sales falling slightly,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.

“We have always believed that for the housing recovery to be considered robust, we will need strong and sustained full-time job and income growth. Recent data indicating the creation of more than 200,000 jobs over each of the last six months, combined with this month’s improvement in the share of consumers reporting significantly higher household income than a year ago, does provide some reason for optimism. If these trends continue, they could lead to some upside in housing in 2015,” he said.

One bright spot for housing is that the gap has narrowed between the share of consumers who say now is a good time to buy a home versus those who say it is a good time to sell, indicating a better balance of supply and demand in the market.

In addition, the share of consumers who say their home has increased in value since they bought it rose to an all-time survey.

Consumers’ rising optimism about their personal financial situation also may foreshadow more positive housing sentiment. Those who say their income is significantly higher than it was 12 months ago increased 4 percentage points to a survey high of 28%, while those who say their personal financial situation has gotten worse within the last year declined to a survey low of 17%.

Homeownership and Renting

  • The average 12-month home price change expectation fell to 2.3%.
  • The share of respondents who say home prices will go up in the next 12 months continued its downward trend, falling to 42%. The share who say home prices will go down also decreased—to 8%.
  • The share of respondents who say mortgage rates will go up in the next 12 months fell by one percentage point to 54%.
  •  Those who say it is a good time to buy a house fell to 67%, and those who say it is a good time to sell a house rose to 43%—tying the survey high.
  • The average 12-month rental price change expectation decreased to 3.8%.
  • The percentage of respondents who expect home rental prices to go up fell to 51%.
  •  Half of respondents thought it would be difficult for them to get a home mortgage today.
  • The share who say they would buy if they were going to move fell slightly to 67%.

The Economy and Household Finances

  • The share of respondents who say the economy is on the wrong track increased by 5 percentage points from last month to 59%.
  • The percentage of respondents who expect their personal financial situation to get better over the next 12 months dropped to 40%.
  • The share of respondents who say their household income is significantly higher than it was 12 months ago increased by 4 percentage point to 28%—a survey high.
  • The share of respondents who say their household expenses are significantly higher than they were 12 months ago fell 2 percentage points to 36%.

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