Despite slow job growth, Americans’ attitudes about homeownership, the economy, and personal finances continue to move incrementally in a positive direction, according to results from Fannie Mae’s April 2012 National Housing Survey. The continued stabilization of consumer attitudes coupled with growth in areas such as home price expectations, whether it is a good time to sell one’s home, direction of the economy, and the percentage of Americans who saw an increase in their personal income indicate an alignment of factors that may influence Americans’ decision making about purchasing a home.
“This month’s survey shows a continued gradual improvement in consumer sentiment and outlook for home prices,” saysDoug Duncan, vice president and chief economist of Fannie Mae. “After flatlining at depressed levels for over a year, a growing share of consumers indicate that it is a good time to sell, suggesting rising optimism for the housing market. Overall, consumer views of housing market conditions have become more supportive of home purchases, and sustained healthy hiring is required to help realize these improved expectations. Friday’s report of a second consecutive setback in job creation supports the view that the housing recovery will remain uneven this year.”
On average, Americans expect home prices to increase 1.3 percent over the next twelve months (the highest value yet recorded), while the percentage of Americans who say it is a good time to sell their home continued to rise to 15 percent in April (up from low, flat levels during 2011). In turn, confidence in the economy’s direction rose to a survey all-time high in April (hitting 37 percent, an increase of 2 percentage points from last month). Another positive trend is the increased share of those who reported their income as “significantly higher” from twelve months ago, which is now at the highest level recorded over the past year and 7 percentage points higher than those who reported income as “significantly lower” (the largest difference between the two since the survey began).
The survey showed that confidence in the economy’s direction rose to the highest point in the survey’s two-year history this month, hitting 37 percent, an increase of 2 percentage points from last month.
Only 12 percent think that their personal financial situation will worsen in the next 12 months, consistent with February and March as the lowest value in more than a year.
Additionally, 23 percent of respondents saw an increase in their personal income from 12 months ago, a 2 percentage point increase from March and the highest level recorded during the past year.
Thirty-six percent say their expenses have increased significantly over the past 12 months, a 2 percentage point increase from last month and a return to the level recorded in January.
On average, Americans expect home prices to increase by 1.3 percent over the next 12 months, up 0.4 percentage points since last month and the highest value yet recorded.
The survey showed that 32 percent of respondents expect home prices to increase over the next 12 months, a slight decline from the sharp spike last month.
Thirty-nine percent of Americans say that mortgage rates will go up in the next 12 months, consistent with last month’s value.
The percentage of Americans who say it is a good time to buy decreased by 2 percentage points to 71 percent, while the percentage of respondents who say it is a good time to sell continued to increase this month to 15 percent.
On average, respondents expect home rental prices to increase by 3.6 percent over the next 12 months, a 0.5 percentage point decrease versus last month.
Forty-nine percent of respondents think that home rental prices will go up, a 1 percentage point increase from last month and the highest number recorded to date.
Thirty-two percent of respondents say they would rent if they were going to move, a 2 percentage point increase from last month and the highest level since November 2011.
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