by Bill McBride on 10/09/2012
Results from Fannie Mae’s September 2012 National Housing Survey show Americans’ optimism about the recovery of the housing market and with regard to homeownership continued its gradual climb, bolstered by a fseries of mortgage rate decreases experienced throughout the summer. Consumer attitudes about the economy also improved substantially last month, breaking the progression of waning confidence seen during much of this year.
“Consumers are showing increasing faith in the nascent housing recovery,” said Doug Duncan, senior vice president and chief economist of Fannie Mae. “Home price change expectations have remained positive for 11 straight months, and the share expecting home price declines has stabilized at a survey low of only 11 percent. Furthermore, the Federal Reserve’s latest round of quantitative easing has caused a large drop in mortgage rate expectations. Friday’s September jobs report, including the strong upward revisions for prior months, a sizable increase in earnings, and a sharp decline in the unemployment rate, should provide further impetus for improving consumer confidence in the housing market.”
Keeping a relatively steady pace with recent periods, survey respondents expect home prices to increase an average of 1.5 percent in the next year. The share who say mortgage rates will increase in the next 12 months dropped 7 percentage points to 33 percent. Nineteen percent of those surveyed say now is a good time to sell, marking the highest level since the survey began in June 2010. Tying the June 2012 level (and the all-time high since the survey’s inception), 69 percent of respondents said they would buy if they were going to move.
With regard to the economy overall, 41 percent of consumers now believe the economy is on the right track, up from 33 percent last month, while 53 percent believe the economy is on the wrong track, compared with 60 percent the prior month. Both the right track and wrong track figures mark the highest and the lowest readings, respectively, since the survey began in June 2010.
I usually don’t these survey results, but it does appear consumers are gaining confidence in the housing market.