Improvements in the labor market in 2014 have not translated to rapid housing market recovery this year, according to the Fannie Mae August 2014 National Housing Survey. Instead, data in the survey indicated that recovery for the housing market will be slow heading into 2015.
The number of people surveyed who said they believe now is a good time to sell a home fell six percentage points to 64 percent, an all-time low since the monthly survey began in June 2010. The number of people who said now is a good time to buy a home also declined to 38 percent.
"The August National Housing Survey results lend support to our forecast that 2015 will likely not be a breakout year for housing," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "The deterioration in consumer attitudes about the current home buying environment reflects a shift away from record home purchase affordability without enough momentum in consumer personal financial sentiment to compensate for it."
The number of respondents surveyed who believe home prices will increase in the next 12 months stayed at 42 percent from July to August, while the percentage of respondents who say they think home prices will go down in the next year increased to 9 percent while the share of those who thought and mortgage rates will go up in the next 12 months fell to 50 percent. The average 12-month home price expectation also took a slight dip from July to August, to 2.1 percent.
The percentage of survey respondents who said they would buy a home if they moved dropped to 64 percent while they number who said they would rent if they moved jumped up to 32 percent. The 32 percent gap between the two is the smallest in more than a year.
As far as attitudes toward the economy, the number of people surveyed who believe the economy is on the wrong track dropped down to 56 percent from July to August. The number of respondents who believe their financial situation will get better in the next 12 months went up to 44 percent, but the percentage who say their household income is significantly higher than it was at this time last year dropped from 28 to 23 percent from July to August.
"To date, this year’s labor market strength has not translated into sufficient income gains to inspire confidence among consumers to purchase a home, even in the current favorable interest rate environment," Duncan said. "Our third quarter Mortgage Lender Sentiment Survey results, to be released later this month, are expected to show whether mortgage demand from the lender perspective is in line with consumer housing sentiment."
Fannie Mae representatives polled 1,000 Americans live via telephone for the results in the August 2014 National Housing Survey.