Fannie Survey Hints at Warmer Spring for Housing

Fannie Mae sees results from its most recent NationalrnHousing Survey (NHS) as possibly portending a pickup in home buying and sellingrnactivity this spring.  Results of thernsurvey show that despite recent month-to-month volatility in housing marketsrnand a softening of the recovery, many consumer attitudes have continued to movernin a positive direction.</p

The share of the March survey respondents who say it is arngood time to sell a home jumped four percentage points from February’s level torn38 percent, up from 26 percent in March 2013. rnThose who thought it was a good time to buy increased one point to 68, twornpoints below responses one year earlier.</p

While 54 percent of respondents expect mortgage rates tornincrease over the next 12 months and virtually none expect them to go down, thernmajority believe they could easily get a mortgage.  The percentage giving that answer increasedrnto 52 percent, tying the all-time survey high of 52 set in January, a number whichrndropped sharply to 45 percent in February. rn</p

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Attitudesrntoward home prices also stabilized during the month.  Those who expect prices to continue tornincrease over the next 12 months went from 52 percent of respondents inrnFebruary to 48 while those who expected prices to stay the same increased byrnfour points to 42 percent.  Among thosernexpecting further price increases the intensity of those hikes slowed from anrnaverage of 3.2 percent to 2.7 percent.  </p

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Americans’ attitudes regarding their personal finances also improvedrn- those who expect their financial situation to worsen during the next 12rnmonths decreased to 12 percent, a significant drop from 21 percent at the samerntime last year, and the share who say their personal financial situationrnimproved during the past year reached an all-time survey high of 40 percent.</p

The right track/wrong track responses however remain highlyrnnegative.  Those who feel the economy isrnon the wrong track increased one percentage point to 58 percent, precisely wherernit was one year ago, while right track answers dropped two points to 33rncompared to 35 in March 2013. </p

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A slight majority of respondents expect further rentrnincreases with the average price change decreasing on basis point to 4.2rnpercent.  </p

Despite it all, the share of survey participants who sayrnthey would buy if they were going to move increased 2 percentage points to 68rnpercent.</p

“The housing recovery continues to proceed in fits andrnstarts. Rising mortgage rates and a lack of supply have dampened housing marketrnmomentum,” said Doug Duncan, senior vice president and chief economist atrnFannie Mae. “However, we see several positive signs going into this year’srnspring home buying season, compared with last year. For example, consumers arernless pessimistic about their personal finances, and more optimistic about therncurrent selling environment and their ability to get a mortgage. Still, thosernwho are pessimistic about buying or selling a home today tend to point torneconomic conditions as the primary issue, and most consumers continue to sayrnthe economy is on the wrong track. Looking forward, we expect to see a pickuprnin economic growth later in the year, and this may boost the confidence ofrnprospective buyers and sellers.”</p

Fannie Mae’s NHS is conducted monthly by phone among 1,000rnAmericans.  Participants include rentersrnand homeowners both with and without a mortgage who are asked about 100rnquestions to assess their attitudes toward owning and renting a home, home andrnrental price changes, homeownership distress, the economy, household finances,rnand overall consumer confidence. The March 2014 Fannie Mae National HousingrnSurvey was conducted between March 1, 2014 and March 23, 2014.

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