Financial News
Americans' Expectations Align to Encourage Home Buying
Updated: 2012-04-24T12:07:00

More consumers may be looking to purchase homes with a shift in
several key housing market indicators, according to Fannie Mae's
March 2012 consumer attitudinal National Housing Survey. More
Americans now expect both home rental and home purchase prices to
increase over the next year. Nearly half of consumers expect higher
rental prices, the highest number recorded since monthly tracking
began in June 2010. Thirty-three percent expect home prices to
increase, up 5 percentage points since last month, and the highest
percentage recorded in over a year. In addition, confidence in
consumers' views of their own finances is stabilizing-for three
straight months-44 percent believe their personal finances will get
better over the next year. These trends may be providing Americans
with an increased sense of urgency to buy a home as 73 percent of
Americans now believe it is a good time to buy a home, up from
seventy percent in February.
"Conditions are coming together to encourage people to want to buy
homes," says Doug Duncan, vice president and chief economist of
Fannie Mae. "Americans' rental price expectations for the next year
continue to rise, reaching their record high level for our survey
this month. With an increasing share of consumers expecting higher
mortgage rates and home prices over the next 12 months, some may
feel that renting is becoming more costly and that homeownership is
a more compelling housing choice."
Homeownership and Renting
Thirty-three percent of respondents expect home prices to increase
over the next 12 months, a five percentage point increase from last
month, the highest level over the past 12 months.
The survey shows that on average, Americans expect home prices to
increase by 0.9 percent over the next 12 months (up slightly since
last month).
Additionally, 39 percent of Americans say that mortgage rates will
go up in the next 12 months, a five percentage point increase from
last month.
The percentage of respondents who say it is a good time to buy rose
by three points to 73 percent, the highest level in over a year,
while the percentage of respondents who say it is a good time to
sell rose one point to 14 percent this month.
On average, respondents expect home rental prices to increase by
4.1 percent over the next 12 months, a significant increase since
February, and the highest number recorded to date.
Forty-eight percent of respondents think that home rental prices
will go up, a three percentage point increase from last month and
the highest number recorded to date.
Sixty-six percent of respondents say they would buy their next home
if they were going to move, up one point since last month, while
thirty percent say they would rent, up one point versus last
month.
The Economy and Household Finances
The rise in confidence in the economy's direction leveled this
month, with 35 percent responding that they think the economy is on
the right track, consistent with February's total. The percentage
who say the economy is on the wrong track rose slightly from 57
percent to 58 percent.
Only 12 percent think that their personal financial situation will
worsen in the next 12 months, consistent with February as the
lowest value in over a year, and tied with January 2011 for the
lowest to date.
Twenty-one percent of respondents say their income is significantly
higher than it was 12 months ago, up 1 point versus February, while
63 percent say it has stayed the same - consistent with February's
values
Thirty-four percent say their expenses have increased significantly
over the past 12 months (a slight increase of one percentage
point).
By Keosha Burns
Apply Now




