Consumers were generally positive toward the housing market in April, but the improvement in housing sentiment was not enough for analysts to expect any breakout improvements for housing in the coming year, according to Fannie Mae's April 2015 National Housing Survey released Thursday.
Following declines in February and March, the percentage of respondents who said they would prefer to buy a home if they moved rose by three percentage points up to 63 percent, while the share of respondents who said they would rent if they moved dropped to 32 percent. The home price expectation for the next 12 months rose by 2.8 percent, but the share who said now is a good time to buy dropped four percentage points from March to April down to 63 percent. The percentage who said now is a good time to buy held steady from March to April at 46 percent, tying the survey high set in March.
Consumer sentiment toward the economy took a slight step backward in April, with the percentage of respondents who said the economy is on the right track fell by one percentage point down to 42 percent. Meanwhile, the share who said the economy is on the wrong track increased by one percentage point up to 49 percent.
"The spring and summer home buying season has gotten off to a stronger start, reflected in some of the improvement in consumer housing sentiment," said Doug Duncan, SVP and chief economist at Fannie Mae. "The share of consumers who intend to own rather than rent their next home rebounded after a two-month slide. Meanwhile, home price growth expectations strengthened to the strongest pace since last October. Nevertheless, consumers continue to express concerns about the recent weakening economic conditions and high home prices. These combine to depress the share of consumers believing it is a good time to buy a home."
Sentiment toward personal finances took a step up in April, with the percentage of respondents who said they expect their personal financial situation to get worse over the next 12 months falling to a new survey low of 10 percent. The percentage who said they have a significantly higher household income now than they did 12 months ago increased by two percentage points, up to 24 percent. A new survey low of 29 percent of respondents said their household expenses are significantly higher than they were 12 months ago.
According to Fannie Mae, the information in the April 2015 National Housing Survey for the most part mirrors the findings of Fannie Mae’s Home Purchase Sentiment Index, "which has remained largely flat since last fall, further suggesting that housing growth may remain subdued in 2015." Fannie Mae will release its new Home Purchase Sentiment Index this summer.
"When we consider both the continued caution of consumers and the positive start to the year, we believe that these results support our expectation that 2015 will be a year of modest growth in housing activity," Duncan said.