With a busier season for real estate transactions just around the corner, consumers are predicted to become more optimistic regarding the national housing market and their own financial situation. Results from the latest National Housing Survey from Fannie Mae revealed that consumers are mostly positive when it comes to housing and have remained the same regarding other economic factors in February when compared to the month before.
Thirty-eight percent of those surveyed agreed that the economy is on the right track, a figure that has been around that same level since December. This is indicative of a slow but stabilizing economy, with some areas seeing more notable improvements than other. In addition, the number of consumers who believe their personal finances will improve over the next year slipped by 2 points, with just 41 percent agreeing. The report also revealed that 21 percent of respondents said their household income is significantly higher than it was this time a year ago, a 2 percentage point drop from January.
When looking specifically at housing, 48 percent of people questioned said home prices will likely increase over the next 12 months, a survey high. The share of those surveyed who said home prices will decline this year remained at 10 percent. According to data from the government-sponsored enterprise, the average 12-month home price change expectation rose 0.5 percent from the month before to 2.9 percent, the highest level in survey history.
While economists say mortgage rates will remain below 4 percent in 2013, 45 percent of those surveyed said mortgage rates will rise, a 4 percentage point gain from the previous month. This marks the highest level since August 2011. Seven percent said mortgage rates will decline, an idea not supported by recent housing market news and overall economic improvements.
Fannie Mae optimistic of what's to come in 2013
"Despite fiscal headwinds and political uncertainty, consumer sentiment toward housing is robust and continues to gather strength," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "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."
Data from the report showed the 25 percent of respondents who believe now is an optimal time to sell their homes reached another survey milestone, while 67 percent of those surveyed said they would buy a home if they were to relocate in the coming 12 months.