Improving Financial Outlooks Could Help Housing – Fannie Survey

The gap between Americans who think itrnis a good time to buy a house and those who feel it is a good time to sellrnnarrowed by six percentage points in July. rnThis could indicate, Fannie Mae said today, a better balance betweenrnsupply and demand.  Of respondentsrnparticipating in the company’s National Housing Survey, 67 percent thought itrnwas a good time to buy, down from 70 percent in June, while those viewing it asrna good time to sell rose from 40 to 43 percent.</p

Inrnaddition, the share of consumers who say their home has increased in valuernsince they bought it rose to an all-time survey high, which suggests arnlong-term positive trend for household balance sheets that may encourage morernpotential buyers and sellers to enter the market.</p

Americans’ attitudes toward the housingrnmarket remain mixed, Fannie Mae said. rnAnswers to the survey indicating a steady improvement in respondents’rnpersonal financial outlook may bode well for housing over the coming months.  The percentage who say their income hasrnimproved over the last 12 months jumped up four percentage points to 28 fromrnJune to July while the number who expect an increase over the next 12 monthsrnremains in the low 40 percent range where it has been for at least a year.</p

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Consumerrnattitudes about the economy as a whole however are growing more negative.  Thernshare of respondents who believe the economy is on the wrong track increased byrn5 percentage points from last month to 59 percent.</p

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“The continued cautiousrnsentiment expressed across the range of consumer indicators this month givesrnweight to our view that the first phase of the housing recovery isrndecelerating, and 2014 will be a year of mixed housing outcomes with homernprices rising more slowly and home sales falling slightly,” said DougrnDuncan, senior vice president and chief economist at Fannie Mae. “We havernalways believed that for the housing recovery to be considered robust, we willrnneed strong and sustained full-time job and income growth. Recent datarnindicating the creation of more than 200,000 jobs over each of the last sixrnmonths, combined with this month’s improvement in the share of consumersrnreporting significantly higher household income than a year ago, does providernsome reason for optimism. If these trends continue, they could lead to some upsidernin housing in 2015.”</p

The share of respondents who expectrnan increase in home prices over the next 12 months fell again by 3 points andrnis now at 42 percent and the average expectations for the increase fell to 2.3rnpercent from 2.4 percent.  The share whornsay home prices will go down also decreased-to 8 percent. </p

The percentage of respondents whornexpect rents to rise fell from 54 to 51 percent and the average 12 month pricernchange expectation took a big drop, from 4.3 to 3.8 percent.</p

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The Fannie Mae National HousingrnSurvey polls 1,000 Americans via a live telephone interview each month tornassess their attitudes toward owning and renting a home, home and rental pricernchanges, homeownership distress, the economy, household finances, and overallrnconsumer confidence. Homeowners and renters are asked more than 100 questionsrnused to track attitudinal shifts.  Findingsrnare compared to the same survey conducted monthly beginning June 2010.

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