July 9, 2013 4:56 am
Although sentiment toward both the current home buying and selling environments retreated slightly, it remains near the survey highs of last month, with 72 percent saying it is a good time to buy and 36 percent saying it is a good time to sell.
“The spike in mortgage rate expectations this month seems to have had an impact on a number of the survey’s indicators and may increase housing activity in the near term by driving urgency to buy,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Consumers may recognize that today’s still favorable mortgage rates and homeownership affordability levels will recede over time. Given rising home and rental price expectations and improving personal financial attitudes, more prospective homebuyers may be deciding that now is the time to get off the fence.”
Among those surveyed, 56 percent say rental prices will go up during the next year – an 8 percentage point increase and the highest level since the survey’s inception – and the average 12-month rental price change expectation jumped 1.2 percent to 4.6 percent. Americans’ outlook on their personal finances also increased significantly in June. The share who expect their personal financial situation to improve during the next year climbed to 46 percent, the highest level since June 2010. The share who say their household income is significantly higher than it was 12 months ago jumped 6 percentage points to a survey high 26 percent.
Homeownership and Renting
• At 3.8 percent, the average 12-month home price change expectation fell slightly from last month’s survey high.
• The share of people who say home prices will go up in the next 12 months hit a survey high 57 percent, while those who say home prices will go down held steady at the survey low 7 percent.
• The share of respondents who say mortgage rates will go up increased 11 percentage points to 57 percent, the highest level since the survey’s inception.
• At 72 percent and 36 percent, respectively, the shares who say it is a good time to buy a house and who say it is a good time to sell a house both fell 4 percentage points from May’s survey highs.
• The average 12-month rental price expectation jumped to 4.6 percent, a 1.2 percent increase over last month.
• Increasing 8 percentage points from May and reaching a survey high, 56 percent of those surveyed say home rental prices will go up in the next 12 months.
• Forty-seven percent of respondents think it would be easy for them to get a home mortgage today, a slight increase over last month.
• The share of respondents who said they would buy if they were going to move decreased slightly to 65 percent.
The Economy and Household Finances
• At 38 percent, the share of respondents who say the economy is on the right track decreased 2 percentage points from May.
• The percentage of people who expect their personal financial situation to get better over the next 12 months jumped to 46 percent, the highest level since June 2010.
• The share of respondents who say their household income is significantly higher than it was 12 months ago rose 6 percentage points to a survey high 26 percent.
• The percentage of respondents who say their household expenses are significantly higher than they were 12 months ago rose to 36 percent.
Published with permission from RISMedia.