Improving Consumer Attitudes Suggest Continued Strength in Housing Market

  Improving Consumer Attitudes Suggest Continued Strength in Housing Market

More Americans Believe Economy Headed in Right Direction

PR Newswire

WASHINGTON, Dec. 10, 2012

WASHINGTON, Dec. 10, 2012 /PRNewswire/ -- Despite continued uncertainty
surrounding the fiscal cliff, Americans are showing increased confidence in
the housing market and the direction of the economy. According to results from
Fannie Mae's November 2012 National Housing Survey, such improvement bodes
especially well for continued strengthening in the housing sector, which in
turn is likely to support overall economic growth.

"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, senior vice
president and chief economist of Fannie Mae. "On the housing front, attitudes
about the current selling environment continue to improve, with a significant
increase in those saying it would be a good time to sell. 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. 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."

The November survey results show significant movement across many of the
indicators. The share of respondents who say now is a good time to sell a home
jumped 5 percentage points in November to 23 percent – the highest level since
the survey began in June 2010 – narrowing the gap with those who say it is a
good time to buy. The percentage of respondents who expect mortgage rates to
go up increased by 4 percentage points to 41 percent. Those expecting home
prices to go down within the next year also rose by 4 percentage points to 14
percent over last month, a rebound from the survey's record low in the prior
month, while the share who believe home prices will go up in the next 12
months edged up to 37 percent, tying the survey high. Of note, 51 percent of
respondents now say it would be easy to get a mortgage, marking the highest
rate since the survey's inception (this survey finding is in addition to the
11 National Housing Survey indictors).

When asked about the economy, those who say it is on the wrong track dipped 6
percentage points since October and a total of 25 percentage points in the
past year. Respondents expressed some improvement in the status of their
current finances; however, due potentially to the looming fiscal cliff, 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 since
December 2011.

SURVEY HIGHLIGHTS

Homeownership and Renting

  oAverage home price change expectation held steady at 1.7 percent.
  oFourteen percent of those surveyed say that home prices will go down in
    the next 12 months, a 4 percentage point increase over last month.
  oThe percentage who think mortgage rates will go up continued to rise,
    increasing 4 percentage points in November to 41 percent.
  oTwenty-three percent of respondents say it is a good time to sell, a 5
    percentage point increase over last month, and the highest level since the
    survey's inception.
  oThe average rental price expectation hit 4 percent in November, a 0.9
    percent rise over the past two months.
  oForty-eight percent of those surveyed say home rental prices will go up in
    the next 12 months, a slight decrease from last month.
  oThe share of respondents who said they would buy if they were going to
    move held relatively steady at 67 percent.
  oFifty-one percent of respondents now say it would be easy to get a
    mortgage, marking the highest rate since the survey's inception.

The Economy and Household Finances

  oHitting 50 percent for the first time since the survey's inception, the
    percentage who think the economy is on the wrong track has declined by 25
    percentage points over the past year, and by 6 percentage points from last
    month.
  oThe percentage who expect their personal financial situation to get worse
    over the next 12 months rose 5 percentage points to 18 percent, the
    highest level since December 2011.
  oMeanwhile, 21 percent of respondents say their household income is
    significantly higher than it was 12 months ago.
  oHousehold expenses remained stable over the past month, with 56 percent
    responding that their household expenses stayed the same compared to 12
    months ago.

The most detailed consumer attitudinal survey of its kind, the Fannie Mae
National Housing Survey polled 1,001 Americans via live telephone interview to
assess their attitudes toward owning and renting a home, mortgage rates,
homeownership distress, the economy, household finances, and overall consumer
confidence. Homeowners and renters are asked more than 100 questions used to
track attitudinal shifts (findings are compared to the same survey conducted
monthly beginning June 2010). Fannie Mae conducts this survey and shares
monthly and quarterly results so that we may help industry partners and market
participants target our collective efforts to stabilize the housing market in
the near-term, and provide support in the future.

For detailed findings from the November 2012 survey, as well as a podcast
providing an audio synopsis of the survey results and technical notes on
survey methodology and questions asked of respondents associated with each
monthly indicator, please visit the Fannie Mae Monthly National Housing Survey
site. Also available on the site are topic analysis reports that provide
deeper insights into one or more issues based on the compilation of three
monthly studies. The November 2012 Fannie Mae National Housing Survey was
conducted between November 5, 2012 and November 20, 2012. Interviews were
conducted by Penn Schoen Berland, in coordination with Fannie Mae.

Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's
Economic & Strategic Research (ESR) Group included in these materials should
not be construed as indicating Fannie Mae's business prospects or expected
results, are based on a number of assumptions, and are subject to change
without notice. How this information affects Fannie Mae will depend on many
factors. Although the ESR Group bases its opinions, analyses, estimates,
forecasts, and other views on information it considers reliable, it does not
guarantee that the information provided in these materials is accurate,
current, or suitable for any particular purpose. Changes in the assumptions or
the information underlying these views could produce materially different
results. The analyses, opinions, estimates, forecasts, and other views
published by the ESR Group represent the views of that group as of the date
indicated and do not necessarily represent the views of Fannie Mae or its
management.

Fannie Mae is a leading provider of mortgage credit in the United States. We
guarantee and purchase loans so that families can buy homes, refinance their
existing mortgages, or access affordable rental housing. Fannie Mae is focused
on assisting homeowners in distress, stabilizing neighborhoods, and
encouraging sustainable lending. We are committed to improving our financial
condition and our priorities are aligned with the public interest. Our work
supports the housing recovery today and is helping to build a better housing
finance system for the future.

Follow us on Twitter: http://twitter.com/FannieMae.

SOURCE Fannie Mae

Website: http://www.fanniemae.com
Contact: Pete Bakel, +1-202-752-2034; or Resource Center: 1-800-732-6643
 
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