American consumers remain cautiously optimistic of housing as home prices rise, ""Fannie Mae"":http://www.fanniemae.com/portal/index.html reported Monday.
[IMAGE]According to the GSE's August 2012 National Housing Survey, consumers maintain a cautious but improving view of homeownership and the housing market. The average home price change expectation is 1.6 percent, mostly consistent with July's results and down from a June high of 2.0 percent. Meanwhile, 11 percent of those surveyed say home prices will go down in the next year, holding steady at the lowest level since the survey began in 2010.
Eighteen percent of respondents say it is a good time to sell, the highest level since the survey began. At the same time, the percentage of respondents who say it is a good time to buy remained steady at 73 percent. Approximately 40 percent of respondents said mortgage rates will go up in the next year, 4 percentage points higher than July.
Consumers scaled back rental expectations a bit. Of those surveyed, 44 percent said they expect rental prices to increase in the next year, a drop of 3 percentage points, while 5 percent expect rental prices to fall. The average rental price change expectation fell 0.7 percent to 3.2 percent, the lowest level since January this year.
While consumer sentiment demonstrated a slight shift toward buying over renting, stalling household financial expectations and falling economic confidence will likely temper the housing market recovery.
""Consumer attitudes toward the housing market remain modestly positive, despite signs of increase concern over the direction of the economy,"" said Doug Duncan, SVP and chief economist at Fannie Mae. ""Friday's disappointing jobs report underpins the gradual nature of this year's housing recovery and supports our view that the muted economic recovery is still subject to downside risk and that additional Fed easing will soon be forthcoming.""
The number of respondents who believe the economy is headed in the wrong direction continued to tick up to 60 percent, the third straight rise to the highest reading since the start of the year. Thirty-three percent said the economy is on the right track, a slight drop from last month and 5 percentage points down from May's peak.
Those who expect their financial situation to get worse dipped to 13 percent, while those who expect no changes in their financial situation increased to 41 percent.
Finally, the share of respondents who say their household income is significantly higher than it was a year ago remained level at 20 percent, while those who say it is significantly lower increased to 16 percent.