Consumer confidence breaks darkness surrounding housing
Higher home sales and growing optimism on the jobs front are further signs of a stabilizing real estate market, Fannie Mae concluded Thursday.
"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," said Doug Duncan, chief economist for Fannie Mae.
The government-sponsored enterprise released the results of its January 2013 National Housing Survey.
After polling just over 1,000 Americans, Fannie Mae concluded more survey respondents believe now is a good time to sell a home, with 23% responding favorably to that question, up from 11% last year.
Expectations around personal finances remain flat, while projections for consumer home prices and rental and ownership properties are at their highest levels in two-and-a-half years.
About 41% of respondents believe prices will rise in the next 12 months, down 2 percentage points from December’s survey high.
Those who believe prices will continue to drop reached a low of 10%. Forty-one percent of respondents expect mortgage rates to tick up in the coming year.
Americans also see rental prices rising alongside property values, with 50% predicting an uptick in rental prices in the next 12 months.
The good news is homeownership is still a valued endeavor, with 65% of surveyed Americans saying they would buy if moving in the near future.
About 43% of Americans see their financial situations improving over the next year, a 3-percentage point increase from the past survey.
And twenty-three percent expect their household incomes to rise significantly, which is higher than it was 12 months ago.
Fannie Mae's chief economist Doug Duncan summed up the results, noting that a few factors are fostering more confidence in the housing market.
"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," Duncan said. "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."