Consumers More Optimistic About Housing in Fannie Mae Survey

Consumers' perceptions of housing and the economy are growing more and more positive, according to responses in ""Fannie Mae's"":http://www.fanniemae.com/portal/index.html November 2012 ""National Housing Survey"":http://www.fanniemae.com/resources/file/research/housingsurvey/pdf/nhs-monthly-data-121012.pdf.

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""Consumer attitudes toward both the economy and the housing market continue to gather momentum, with many of our 11 key National Housing Survey indicators at or near their two-and-a-half year highs,"" said Doug Duncan, SVP and chief economist at Fannie Mae.

Attitudes about the current selling environment continue to improve, with 23 percent of respondents saying now is a good time to sell a home, the highest percentage since the survey began in 2010. The number of respondents who say now is a good time to buy stayed flat for the third consecutive month at 72 percent.

The average home price change expectation remained steady from October at 1.7 percent, up from 1.5 percent in September but down from this year's high--2.0 percent--in July. Fourteen percent of those surveyed say home prices will drop in the next year, up 4 percentage points over October, while the number of those expecting increases over the next year inched up one point to 37 percent--tying the survey high.

The share of respondents who said they would purchase a home if they were going to move edged up to 67 percent, while the share who would rent remained unchanged at 29 percent. The majority of respondents--48 percent--expect rental prices to increase in the next 12 months, though that share is slightly down month-over-month. The average rental price change expectation hit 4 percent, a 0.9 percent rise over the past two months.

With mortgage rates currently nesting near record lows, the number of respondents who believe rates can only go up in the next year increased 4 percentage points to 41 percent. Interestingly, even with the mortgage market suffering from tight credit conditions, the share of respondents who say it would be easy to get a mortgage at this point rose to 51 percent, its highest level since the survey began.

""This growing confidence in a housing recovery, in addition to other factors, may reinforce growing consumer optimism regarding the improving direction of the general economy,"" Duncan said. ""Those indicating that the economy is on the right track has risen to 44 percent while those saying it's on the wrong track has fallen to 50 percent, the smallest gap since the survey's inception.""

Twenty-one percent of respondents say their household income is significantly higher than it was a year ago, while 14 percent say their income is lower. Household expenses remained relatively stable from October to November, with 56 percent of those surveyed saying their expenses are about the same as they were 12 months ago.

The fiscal cliff did rear its head in one aspect of the survey: While respondents expressed improvement in the status of their current finances, the share who expect their personal financial situation to get worse over the next 12 months rose 5 percentage points to 18 percent, the highest level in nearly a year.