More Consumers Positive On Housing, But Not Quite Ready to Leave the Sidelines

Survey Results Suggest Continued Modest Housing Growth in 2015

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May 07, 2015, 09:00 ET

WASHINGTON, May 7, 2015 /PRNewswire/ -- Results from Fannie Mae's April 2015 National Housing Survey™ show some improvement in housing sentiment, but likely not enough to trigger any breakout improvements in housing market activity this year. Among those surveyed, the share saying they would prefer to buy a home if they were to move increased to 63 percent in April, following a drop of six percentage points in February and March. In addition, average home price growth expectations continued their steady climb from late last year, with respondents now saying home prices will increase by 2.8 percent during the next 12 months. However, the share who believe this is a good time to buy a home decreased by four percentage points as consumer concerns regarding high home prices surged for a second consecutive month, matching renewed concerns regarding the state of the economy. These data points as a whole mirror Fannie Mae's Home Purchase Sentiment Index (expected to be released this summer), which has remained largely flat since last fall, further suggesting that housing growth may remain subdued in 2015.

"The spring and summer home buying season has gotten off to a stronger start, reflected in some of the improvement in consumer housing sentiment," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "The share of consumers who intend to own rather than rent their next home rebounded after a two-month slide. Meanwhile, home price growth expectations strengthened to the strongest pace since last October. Nevertheless, consumers continue to express concerns about the recent weakening economic conditions and high home prices. These combine to depress the share of consumers believing it is a good time to buy a home. When we consider both the continued caution of consumers and the positive start to the year, we believe that these results support our expectation that 2015 will be a year of modest growth in housing activity."

SURVEY HIGHLIGHTS

Homeownership and Renting

The average 12-month home price change expectation rose to 2.8 percent.
The share of respondents who say home prices will go up in the next 12 months fell to 46 percent. The share who say home prices will go down fell to 7 percent.
The share of respondents who say mortgage rates will go up in the next 12 months stayed constant at 52 percent.
Those who say it is a good time to buy a house fell to 63 percent, while those who say it is a good time to sell remained at 46 percent – tying last month's survey high.
The average 12-month rental price change expectation rose to 4.1 percent.
The percentage of respondents who expect home rental prices to go up rose to 54 percent.
Those who think it would be easy to get a home mortgage increased by 2 percentage points to 52 percent, while those who think it would be difficult remained at 46 percent.
The share who say they would buy if they were going to move rose 3 percentage points to 63 percent, while the share who would rent fell to 32 percent.

The Economy and Household Finances

The share of respondents who say the economy is on the right track decreased by 1 percentage point to 42 percent, while those who say the economy is on the wrong track rose by 1 percentage point to 49 percent.
The percentage of respondents who expect their personal financial situation to get worse over the next 12 months fell to 10 percent – matching the survey low.
The share of respondents who say their household income is significantly higher than it was 12 months ago rose 2 percentage points to 24 percent.
A new survey low, 29 percent of respondents say their household expenses are significantly higher than they were 12 months ago. A survey high, 60 percent say their expenses are the same.

The most detailed consumer attitudinal survey of its kind, Fannie Mae's National Housing Survey™ polled 1,000 Americans via live telephone interview to assess their attitudes toward owning and renting a home, home and rental price changes, 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). To reflect the growing share of households with a cell phone but no landline, the National Housing Survey has increased its cell phone dialing rate to 60 percent as of October 2014. For more information, please see the Technical Notes. 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 April 2015 survey, as well as technical notes on survey methodology and questions asked of respondents associated with each monthly indicator, please visit the Fannie Mae Monthly National Housing Survey page on fanniemae.com. Also available on the site are in-depth topic analyses, which provide a detailed assessment of combined data results from three monthly studies. The April 2015 National Housing Survey was conducted between April 1, 2015 and April 23, 2015. Most of the data collection occurred during the first two weeks of this period. Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae.

To receive e-mail updates with other housing market research from Fannie Mae's Economic & Strategic Research Group, please click here.

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.

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SOURCE Fannie Mae