Despite a drop in consumer confidence regarding the overall economy and personal finances last month, some Americans have high hopes for the future of the housing market.
Many consumers believe that property values will appreciate by at least 2 percent during the course of the next year, this is the highest level recorded since June 2010, according to a survey conducted by Fannie Mae. An estimated 35 percent of respondents share this belief. This could indicate that a growing number of individuals feel the housing market recovery could finally be underway.
However, one expert from the mortgage giant questions how long this sentiment will last.
"Although this positive trend may be short-lived if the general economy falters, one might ask whether consumers are increasingly seeing the current environment as a unique opportunity to buy a home while home prices remain depressed, rental costs are increasing, and interest rates are near historic lows," said Fannie Mae vice president and chief economist Frank Nothaft.
As a result of these factors, 73 percent of respondents think now is a good time purchase property, the report said. This was a 6 percent increase from the previous month. In addition, prospective borrowers may want to lock in record low mortgage rates now, as 37 percent of consumers believe they will increase in the near future.
Americans uneasy about finances
Although current conditions have pushed housing affordability to an all-time high, the financial situations of many consumers may impact the safety and soundness they feel toward investing in the real estate market. In addition, due to strict standards, many lenders require strong credit scores and sizable down payments. Some Americans currently don't have enough stability in these factors to shop for homes, but they may in the coming months.
Specifically, 42 percent of respondents believe that their personal finances will improve substantially by June 2013. Even though this seems like a significant share, it was actually a decrease of four percentage points percent decrease from the previous month.
Meanwhile, 18 percent of households claim their incomes increased during the past year. While this is still a good thing, it was also a decrease of four percentage points from a month earlier when 22 percent of consumers had the same response and was also the smallest share since November 2011, the report said.