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The share of surveyed Americans who believe home prices will tick up in the next year reached the highest level to-date, at 43%, up 6 percentage points from November, according to Fannie Mae's December National Housing Survey results.
The Fannie Mae National Housing Survey polled 1,002 Americans to assess their attitudes toward owning and renting a home, mortgage rates, homeownership distress, the economy, household finances and overall consumer confidence.
Consumer confidence in the housing industry continued its upswing as home prices, rental prices and mortgage rate expectations increased in November.
Thus, the growing confidence that housing indicators will continue well into 2013 is expected to boost home price activity during the year.
"Combined with consumers' growing mortgage rate and rental price increase expectations, the positive home price outlook could incentivize those waiting on the sidelines of the housing market to buy a home sooner rather than later and thus support continued housing acceleration," said Doug Duncan, senior vice president and chief economist of Fannie Mae.
The average 12-month home price change expectation rose to 2.6%, the highest level since the survey's inception in 2010.
The percentage of those surveyed that believe mortgage rates will rise continued to increase, rising 2 percentage points to 43%, the highest level recorded since August 2011.
About 21% of respondents suggest it’s a good time to sell, down two percentage points from last month's record high. However, this is still a 10-percentage point increase year-over-year.
The 12-month rental price expectation hit the highest level since the survey’s inception in 2010, at 4.4%, up 0.4% from last month.
About 49% of those surveyed said home rental prices will go up in the next year. Also, the share of respondents who said they would buy if they were to move declined slightly to 66%.
However, consumer outlook toward the economy and personal finances due to the fiscal cliff and debt ceiling caused volatility in perceptions of the larger economy.
"This uncertainty seems to be prompting a growing share of consumers to expect their personal finances to worsen and may contribute to weaker near-term economic growth," Duncan said.
Those who expect their personal finances to worsen over the next year increased to 20%, the highest level since August 2011.
About 37% reported higher household expenses compared to last year, a 3-percentage point increase from last month and the highest level since December 2011.
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