Latest Fannie Mae Housing Survey Says: Good Time to Sell

Consumer attitudes toward housing and therneconomy in general continued the slow improvement that has become the norm accordingrnto results from the October National Housing Survey.  Fannie Mae which sponsors the survey said thernshare of respondent households voicing confidence that their personal financialrnsituation would improve over the next 12 months climbed to 45 percent.  This was only a one point gain from thernSeptember survey but was seven points higher than one year ago and the highestrnit has been since June 2013.  At the samerntime the percentage of those who expected personal finances would worsen overrnthat time frame dropped 2 points to 10 percent compared to 22 percent inrnOctober 2013.  </p

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Those who say it is a good time tornbuy a house fell three points to 65 percent but those who view it as a good timernto sell a home increased to 44 percent-a new all-time survey high.  It was also the narrowest the gap has beenrnbetween the two indicators since Fannie Mae began the survey in June 2010.</p

The share of respondents who sayrnhome prices will go up in the next 12 months eased back one point to 44rnpercent, staying within the narrow mid-40’s range where the response hasrnfloated since June.  The share who sayrnhome prices will go down decreased by one point to 7 percent.   Among those who expect home prices to risernthe average expectation for that increase over the next 12 months was 2.8rnpercent compared to 2.2 percent in September.</p

In September the share of those<bexpecting higher mortgages rates dropped by five percentage points while thernshare expecting rates to stabilize rose 5, each response representing 45rnpercent of respondents. The optimism was short lived and in October 48 percentrnexpected rates to rise while 38 percent thought they would stay the same.  Half of respondents said they thought itrnwould be difficult for them to even get a mortgage today, a 2 percentage pointrnincrease from September.</p

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The percentage of respondents whornexpect home rental prices to go up in the next 12 months decreased by six percentagernpoints to 49 percent while the average expectation for rental increases rose torn3.7 percent.  </p

When asked their choice if they werernto move 65 percent said they would buy their next home, down one point from thernprevious survey while 30 percent said they would rent, a 2 point increase.  One year ago 70 percent of respondentsrnindicated a preference for home ownership. rn</p

Forty percent of respondents saidrnthe economy was on the right track, unchanged from the previous survey, while 53rnpercent say it is on the wrong track, a one point decline.  In October 2013 the wrong track answer wasrngiven by 67 percent and the right track by 27 percent.</p

“Consumers are growing morernoptimistic about the housing market in the face of broader improvement inrneconomic sentiment,” said Doug Duncan, senior vice president and chiefrneconomist at Fannie Mae. “The share of consumers who expect their personalrnfinances to get better is near its highest level since the survey’s inception,rnwhile those expecting their finances to get worse reached a survey low. Homernprice expectations rose significantly this month, largely reversing the diprnwitnessed over the past four months, and the share of consumers who think it’srna good time to sell a home reached another survey high. The narrowing gaprnbetween home buying and home selling sentiment may foreshadow increased housingrninventory levels and a better balance of housing supply and demand. Thesernresults may help drive a healthier housing market in 2015.”</p

The Fannie Mae National HousingrnSurvey polls 1,000 Americans, both homeowners and renters, by phone.  Respondents are asked over 100 questionsrnabout owning and renting a home, home and rental price changes, their personalrnfinancial situation, and homeownership and the economy in general.  For the current survey the cell phone dialingrnrate was increased to 60 percent to reflect the growing share of householdsrnwithout a landline.  The October surveyrnwas conducted between October 1 and October 25, 2014.

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