Positive outlooks for the housing market in 2013 has the potential to drive sales, while improvements to the economy will continue to help housing market factors, such as home prices and mortgage rates strengthen this year. Data from Fannie Mae's January National Housing Survey showed increased confidence in sales and personal finances.
When looking at feelings toward homeownership, 65 percent agreed they would buy if they were to move this year, matching the level recorded in December. This could be because 57 percent foresee higher rental prices in 2013. While the market has benefited those looking to make the investment in recent months and throughout much of 2012, rising mortgage rates and home prices have provided additional confidence for current homeowners looking to unload their properties.
Additional data supports this, as 23 percent of those surveyed agree that now is an optimal time to sell, up 12 percentage points from this the same time a year ago. Forty-one percent say home prices will increase over the coming year and just 10 percent say they will decline.
Those who believe mortgage rates will rise decreased 3 percentage points to 41 percent, likely thanks to Freddie Mac's former outlook for 2013 which predicted rates would remain below 4 percent.
Economic stabilization influences confidence in housing market health
While the economy continues to slowly recover from the recession, the survey found that 39 percent of respondents say the economy is moving in the right direction, an improvement from December's level of confidence. More consumers predict their personal finances will get better over the next twelve months, with 43 percent of those surveyed agreeing. When it comes to household expenses, 38 percent said they experienced higher costs.
"The housing market continues to firm, with consumer home price expectations for both rental and ownership properties near the strongest levels that we've seen in the survey's two-and-a-half-year history," said Doug Duncan , senior vice president and chief economist at Fannie Mae. "Concerns about job loss are waning as payrolls are growing – a trend that may give potential homebuyers more confidence that they can meet the financial obligation of homeownership. The upward trend over the past year and a half in the share of consumers who say it's a good time to sell may reflect two related events. First, homeowners see that home prices are improving. Second, the number of homeowners who are underwater is declining, reducing a barrier for those owners who need to sell their home in order to buy a new one."