It looks like avoiding the apocalypse may have put consumers in the mood to buy. Americans continue to report confidence in the housing market despite concerns for their personal finances and the overall economy. Respondents to Fannie Mae’s December National Housing Survey reported positive expectations for home and rental prices as well as mortgage rates.
National Housing Survey Shows More Consumers Expect Higher Home Prices
In December, 43 percent of consumers said they believed home prices would increase over the next 12 months, the largest share since the survey’s inception in June 2010 and a 6 percentage point boost from November. Consumers also expected the price of homes to increase by an average of 2.6 percent over the next year, another high water mark.
Other findings from the National Housing Survey include:
- Twenty-one percent of respondents say they believe it’s a good time to sell, a 2 percentage point decrease from last month’s record high, but a 10 percentage point increase year over year.
- The share of respondents who said they would buy if they were going to move decreased slightly to 66 percent.
- Twenty-two percent of respondents say their household income is significantly higher than it was 12 months ago, a slight increase over last month and a 5 percentage point increase over September.
Doug Duncan: Confidence Could Boost Home Sales
Doug Duncan, the senior vice president and chief economist of Fannie Mae, said that growing consumer confidence could spur home sales.
“The positive home price outlook could incentivize those waiting on the sidelines of the housing market to buy a home sooner rather than later,” Duncan said.He also acknowledged that volatility in consumer perceptions stemming from the fiscal cliff and debt ceiling debates could negatively impact the economy.
“This uncertainty seems to be prompting a growing share of consumers to expect their personal finances to worsen and may contribute to weaker near-term economic growth,” said Duncan.
Elizabeth Jakaitis, an agent with Prudential Rubloff in Lake Forest, said that she hasn’t seen a rise in home prices, but buyers have been more active.
“The interesting thing is that we really aren’t having price increases yet locally, but we’re certainly seeing more sales,” Jakaitis said. “We’re very optimistic.”