Americans’ outlook toward the current home selling market and the future of home rental prices may bode well for purchase activity this year, according to results from Fannie Mae's June 2015 National Housing Survey.
Amid continued strong job and income growth, consumers are looking more favorably on the current selling climate, perhaps portending an uptick in the existing home supply.
“Our June survey results show the positive impact on housing of job and income growth,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The expectation of higher rents is a natural outgrowth of increasing household formation by newly employed individuals putting upward pressure on rental rates. A complementary rise in the good time to sell measure suggests that limited inventory, which is putting upward pressure on house prices, gives an increasing advantage to sellers.
"Together, these results point to a healthier home purchase market, with more renters likely to find owning to be more cost-effective than renting and more sellers likely to put their homes on the market," Duncan said.
Among those surveyed, the share who believe now is a good time to sell a home reached a new survey high, increasing three percentage points to 52% and crossing the 50-percent threshold for the first time in the survey’s history. At the same time, the share who said they expect home rental prices to go up in the next 12 months rose four percentage points to 59%, also an all-time survey high.
With an increase in housing supply from those ready to sell, combined with higher rental cost expectations, more potential homebuyers may be encouraged to leave the sidelines.
Here are some highlights:
- The average 12-month home price change expectation fell to 2.6%.
- The share of respondents who say home prices will go up in the next 12 months fell to 47%. The share who say home prices will go down rose to 7%.
- The share of respondents who say mortgage rates will go up in the next 12 months rose 3 percentage points to 50%.
- Those who say it is a good time to buy a house fell to 63% – tying a survey low – while those who say it is a good time to sell rose to 52% – a new survey high.
- The average 12-month rental price change expectation fell to 4.2%.
- The percentage of respondents who expect home rental prices to go up rose to 59% – a new survey high.
- Those who think it would be easy to get a home mortgage remained at 50%, while those who think it would be difficult remained at 46%.
- The share who say they would buy if they were going to move fell 2 percentage points to 64%, while the share who would rent increased to 30%.
- The share of respondents who say the economy is on the right track increased by 1 percentage point to 39%, while those who say the economy is on the wrong track fell by 1 percentage point to 51%.
- The percentage of respondents who expect their personal financial situation to get worse over the next 12 months fell back to 10% – tying a survey low.
- The share of respondents who say their household income is significantly higher than it was 12 months ago fell 1 percentage point to 27%.
- The percentage of respondents say their household expenses are significantly higher than they were 12 months ago remained at 31%.