American sentiment in housing sector continues march up

Consumers appear to be unfazed by the myriad economic issues that remain unresolved, as a high number of them noted they are confident in one major aspect of the national economic landscape: the housing sector.

Consumers appear to be unfazed by the myriad economic issues that remain unresolved, as a high number of them noted they are confident in one major aspect of the national economic landscape: the housing sector.

According to the National Housing Survey for February, Fannie Mae reports nearly half of respondents said they think home prices and mortgage rates will continue to move up in the coming months - general indicators of an improving market.

Additionally, nearly a quarter of those surveyed indicated they think the first quarter of 2013 is a prime time for sellers to put their homes on the listings, given the still-high buyer demand from coast to coast. Mortgage records show this may be a wise decision, as many buyers - first-time and veteran - are being approved for loan.

Doug Duncan, senior vice president and chief economist at Fannie Mae, indicated that while economic uncertainty remains an issue that could curtail a full housing recovery, confidence among people nationwide could still drive strong growth in the sector.

"Despite fiscal headwinds and political uncertainty, consumer sentiment toward housing is robust and continues to gather strength," said Duncan. "We expect home prices to firm further amid a durable housing recovery, gradually reducing the population of underwater borrowers and helping to boost the share of consumers who say that now is a good time to sell."

General financial sentiment also rose, the poll found. Nearly two in five respondents stated they think the economy is "on the right track," while roughly the same amount of those surveyed also said their personal finances should improve in the next year.

BofA: Home prices likely to improve as year progresses
Consumers aren't alone in thinking home prices will rise through the end of 2013 and into 2014. A report by Bank of America indicates the financial institution projects prices to increase by roughly 8 percent this year.

"We believe a positive feedback loop has begun, where the rise in home prices fuels expectations of further appreciation and easing credit conditions, which in turn stimulates homebuying," BofA officials noted in the report.

One of the only things that may hold the housing recovery back, according to Bank of America U.S. economist Michelle Meyer and mortgage-backed securities analyst Chris Flanagan, is the low inventory of residential properties.



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