Fannie Mae released Monday its most recent National Housing Survey, revealing a slight softening in the housing recovery as monthly indicators remain volatile. Fewer than half of consumers polled expect home prices to continue rising over the next 12 months. Even among those expecting more increases, the average yearly change predicted is 2.7 percent, down half a percentage point from February.
“The housing recovery continues to proceed in fits and starts,” said Doug Duncan, SVP and chief economist at Fannie Mae. “Rising mortgage rates and a lack of supply have dampened housing market momentum.” According to Fannie, 54 percent of consumers last month said they expect rates to keep rising over the next year, while only 3 percent—an all-time survey low—anticipate declines.
Looking at more immediate indicators, responses were more optimistic: More consumers now believe it is a good time to either buy or sell a home compared to February, and the share of those who believe it would be easy to get a mortgage today climbed back up to 52 percent, matching a survey high first recorded in January. American’s attitudes regarding their own finances also improved, albeit slightly. While the share of those expecting their finances to improve over the next 12 months dropped slightly, the share expecting their situations to worsen fell more substantially to 12 percent. Meanwhile, a record 40 percent said their personal financial situation has improved over the past year.
Still, only one-third of those surveyed said the economy is on the right track—continuing a declining trend—and Duncan said those who still harbor doubts about housing “tend to point to economic conditions as the primary issue.” Given the current improving climate, that pessimism may not last, he adds. “Looking forward, we expect to see a pickup in economic growth later in the year, and this may boost the confidence of prospective buyers and sellers.”