Respondents to the Fannie Mae National Housing Survey expect home prices to edge up in the next year a percent or more, as they increase their cautious view of the housing recovery while remaining skeptical of the overall national economy.
That August figure is down slightly from expectations in June that prices would tick up another 2%. Fannie Mae’s August survey incorporates the views of roughly 1,000 Americans.
40% believe mortgage rates will rise in the next 12 months, and the number of respondents who expect home prices to decline hit 11% — the lowest level in two years.
In addition, 18% believe now is a good time to sell, the highest level reached since 2010.
Despite housing looking mildly optimistic, Americans are pessimistic about the overall economy. The number of respondents who believe the U.S. economy is heading in the wrong direction rose 2 percentage points to 60% in August, the third highest reading since January.
Those who expect their situations to worsen financially fell to 13% of survey respondents, while those who believe their financial state will remain the same rose to 41%.
U.S. consumers remain positive about the deals in today’s real estate market, with 73% of the interview subjects saying it’s still a good time to buy a home.
44% believe home prices will tick up in the next year, a decline of 3 percentage points.
Overall, the majority still prefer homeownership over renting with 67% saying they would buy a home if they had to move, while 28% claim they would rent.
“Consumer attitudes toward the housing market remain modestly positive, despite signs of increased concern over the direction of the economy,” said Doug Duncan, senior vice president and chief economist of Fannie Mae. “While the latest results showed a pickup in the share of consumers expecting mortgage rates to rise, reflecting the uptrend of long-term interest rates since mid-July, that may soon change. Friday’s disappointing jobs report underpins the gradual nature of this year’s housing recovery and supports our view that the muted economic recovery is still subject to downside risk and that additional Fed easing will soon be forthcoming.”