Price Expectations Moderating; Credit Availability Improving -Fannie Survey

Fannie Mae said today that anrnimprovement in American’s attitudes about the ease of getting a mortgage mayrnoffset a declining perception about home prices, allowing for continued ifrnmeasured improvement in the housing recovery. rnResults from the January National Housing survey showed a 2 percentagernpoint gain in how easy Americans through it would be to obtain a mortgage to arnsurvey high of 52 percent while the numbers who thought it would be difficultrnto get a mortgage dropped 3 points to 45 percent.  </p

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Atrnthe same time fewer Americans expect home prices to continue their recentrnmeteoric rise and those who do expect prices to continue up have moderated theirrnexpectations over the degree.  The share of people who say home prices will stay the samernin the next 12 months increased 7 percentage points to 45 percent, while thernshare who say home prices will go up in the next 12 months fell by 6 percentagernpoints to 43 percent.  Those who expect arnprice rise now say it will be 2.0 percent over the next 12 months, down fromrnover 3 percent in December.</p

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The share of survey respondents whornfeel it is a good time to buy a house dropped from 67 percent in December to 65rnpercent while those who view it as a good time to sell jumped 5 points to 38rnpercent.  Seventy percent say they wouldrnbuy if they were going to move, an all-time survey high, while those who wouldrnrent hit an all-time low of 26 percent.</p

There was also a big change in rightrntrack/wrong track answers.  The share ofrnrespondents who think the economy is on the right track increased 8 percentagernpoints to 39 percent while the wrong track share declined from 59 to 54 percent.  This was the closest the two numbers haverncome to each other since August and September 2013 when the wrong track/rightrntrack numbers were 57 and 37 respectively. Additionally, the share who expectrntheir personal financial situation to improve in the next year increased to 44rnpercent, continuing an upward trend since November 2013.</p

“A majority of consumers now believernthat it is getting easier to get a mortgage. For the first time in the NationalrnHousing Survey’s three-and-a-half-year history, the share of respondents whornsaid it is easy to get a mortgage surpassed the 50-percent mark, exceedingrnthose who said it would be difficult by 7 percentage points,” said Doug Duncan,rnsenior vice president and chief economist at Fannie Mae. “The gradual upwardrntrend in this indicator during the last few months bodes well for the housingrnrecovery and may be contributing to this month’s increase in consumers’rnintention to buy rather than rent their next home. The dip in overall homernprice expectations, though notable, is consistent with our view of moderatingrnhome price gains this year from a robust pace last year, while positive trendsrnin perceptions about the economy and personal finances over the next yearrnsupport our view of stronger growth in the broader economy.”</p

Rents are expected to increase overrnthe next year by 48 percent of those surveyed, down 5 points fromrnDecember.  The average rental increasernwas 2.8 percent, a full point lower than last month and tied for the surveyrnlow.  </p

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The National Housing Survey isrnconducted by telephone every month with.1.000 Americans, both homeowners andrnrenters.  The survey panel is asked morernthan 100 questions about their attitudes toward owning a home, renting,rnhomeownership distress, the economy, and overall consumer confidence.  The January survey was conducted betweenrnJanuary 1 and January 21, 2014. 

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