Reports of strong home price gains drove confidence in the housing market up to record levels in May, Fannie Mae reported.
According to the GSE's May 2013 National Housing Survey, Americans expressed record confidence in price gains, with 55 percent--a survey high--saying they believe prices will go up in the next year. Only 7 percent of respondents in the survey expect prices to drop, the lowest level since the survey's inception.
In addition, the average 12-month home price change expectation was 3.9 percent, the highest level in the survey's history and a leap over April's 2.7 percent forecast.
Consumers are also much more confident about the market in general. The share of respondents who say now is a good time to sell a home reached a record high of 40
percent, an increase of 10 percentage points, while the share of those saying now is a good time to buy moved up 5 percentage points to its own record high of 76 percent.
""Sentiment toward selling a home appears to be catching up with the strengthening housing market,"" said Doug Duncan, SVP and chief economist at Fannie Mae. ""This jump [in confidence for selling] may foreshadow a gradual return to more normal levels of housing supply from their lows of recent months. In turn, increased housing supply could serve to temper increasing consumer home price expectations.""
In the May survey, 46 percent of Americans said they think it would be easy for them to get a mortgage today, a slight drop from the high of 47 percent recorded for the last several months. Meanwhile, 50 percent say it would be difficult to get a mortgage, down from 51 percent.
Confidence in the larger economy was also slightly improved. The share of respondents who believe the economy is on the right track increased to 40 percent from April's 39 percent, while the share who say the economy is on the wrong track fell to 53 percent.
Meanwhile, the share of respondents who say their household income is significantly lower than it was a year ago fell 3 percentage points to a survey low of 13 percent. Twenty percent said their income is higher--the same share as in the last few months. The percentage of respondents who say their household expenses are significantly higher than they were last year rose slightly to 32 percent.