Confidence in the U.S. housing market is increasing among Americans at the same time that most believe the country’s economy is on the wrong track, according to Fannie Mae’s June 2012 National Housing Survey.
Americans expect home prices to rise 2 percent on average in the next year, the highest estimate since the government-sponsored mortgage company began its monthly survey in June 2010. In the May survey, respondents predicted a 1.4 percent price increase.
The survey found that 48 percent of respondents believe home prices will stay the same over the next year. Rising prices were predicted by 35 percent, the highest portion to answer optimistically since the survey was first conducted.
“Although this positive trend may be short-lived if the general economy falters, one might ask whether consumers are increasingly seeing the current environment as a unique opportunity to buy a home while home prices remain depressed, rental costs are increasing, and interest rates are near historic lows,” Doug Duncan, Fannie Mae’s Senior Vice President and Chief Economist, said in a news release.
Of the nationwide survey’s 1,001 adult respondents, 57 percent said they believe the economy is on the wrong track and 36 said they believe it is on the right track. Those responses have changed little since the survey was conducted in February.
“We’re seeing several signs of optimism right now, but this is optimism compared to a very low bottom,” said Jed Kolko, chief economist and head of analytics for Trulia Inc., a company that runs a real estate information website. “Improvement is not the same as back to normal.”
While 73 percent of respondents said it is a good time to buy a house, 15 percent said it is a good time to sell. This gap is “very telling” and indicates that housing inventory will remain “very tight,” said Kolko.
The portion of respondents who said they would buy a house if they were going to move grew from 63 percent in May to 69 percent in June, the highest level ever recorded in the survey. The number of respondents who said they would rent if they were going to move was the lowest to date at 27 percent, down from 32 percent in May.
Respondents who said they believe mortgage rates will rise in the next year decreased from 41 percent in May to 37 percent in June.
Standard & Poor’s Supercomposite Homebuilding Index was up 53.3 percent year to date this afternoon, compared to the S&P 500’s 7.5 percent gain.