Consumer Housing Outlook Remains Positive Amid Economic Woes
By: Tory Barringer
Stalled confidence in the economy and personal finances apparently hasn’t brought down optimism in the housing market.
Fannie Mae released its July 2012 National Housing Survey Tuesday, showing that consumer optimism regarding the slowly recovering housing market remained strong during the month.
Survey respondents said they expect home prices to increase 1.7 percent in the next year, slightly down from the 2.0 percent survey high recorded in June. Eleven percent of respondents believe home prices will drop, the lowest level recorded since the survey began in June 2010.
In the highest level seen since the survey began, 16 percent of consumers say now is a good time to sell, while a steady 73 percent said it is a good time to buy.
The percentage of respondents who say mortgage rates will increase in the next year declined 5 percentage points since May 2012 to 36 percent. Freddie Mac’s most recent Primary Mortgage Market Survey showed that mortgage rates had inched up from the previous week after months of record lows.
Economic confidence faltered, however. One-quarter of employed respondents said they are concerned about losing their job in the next 12 months, a 3 percentage point increase since June. The share of respondents who believe the economy is on the right track slipped down to 35 percent. In addition, 15 percent of Americans polled expected their personal financial situation to get worse, the highest level recorded in 2012. The percentage of respondents who believe their situation will improve stayed flat at 43 percent.
“Not surprisingly, we see consumers’ attitudes about their household finances remain cautious in this month’s survey, and they continue to show signs of job worries and financial stress,” said Doug Duncan, SVP and chief economist for Fannie Mae. “However, it is encouraging to see that consumer expectations regarding housing largely continue to be upbeat.”
The July jobs report showed encouraging growth, but the GSE warned that it is too soon to tell if it is a signal of “meaningful pickup in economic growth or in consumer outlook for the overall economy.”
“The recent July jobs report showing the strongest nonfarm payroll gain in five months should help to ease consumers’ fear that the economic expansion is faltering. Improvement in the labor market, if sustained, would help bolster the upward trend of consumer attitudes toward housing, which so far has been a glimmer of light amid a dimming economic outlook,” Duncan said.
Since its launch, DS News magazine has positioned itself at the forefront of an
evolving industry. Always current with the most up-to-date
default servicing news, DSNews.com keeps you informed through daily Web casts,
community forums, and a wide range of industry resources.