Will Housing Prices Move Higher in 2013?
Fannie Mae’s December National Housing Survey showed that consumer confidence in the housing sector increased last month as Americans continued to expect home prices to grow. The survey’s results were marked by positive attitudes toward home price, rental price, and mortgage rate expectations, and participants’ belief that housing indicators will improve this year could contribute to a boost in home purchase activity in the coming months, according to the mortgage association
Of the survey’s respondents, 43 percent believed that home prices will increase in the next 12 months by an average of 2.6 percent, the highest level since the survey’s inception in 2010. In regards to mortgages, 43 percent believe rates will continue to rise. Only 21 percent of respondents indicated that December was a good time to sell, a 2 percentage point decrease from November’s record high, but a 10 percent increase year over year.
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“The highest share of consumers in the survey’s two-and-a-half-year history expect home prices to increase in the next 12 months,” wrote Doug Duncan, senior vice president and chief economist, in a press release issued on Monday. “This view is consistent with Fannie Mae’s expectation that home prices will rise going forward on a national basis.” The positive home price outlook could push prospective buyers to purchase a “home sooner rather than later,” he added.
However, even with the strengthening housing market, consumers’ fears regarding the fiscal cliff and the debt ceiling have caused volatility in their perceptions of economic conditions and lead to a growing number of consumers expecting their personal finances to worsen. The share of respondents who said that the economy was on the right track fell by 5 percentage points from last month’s high, to 39 percent.
The survey compiled the answers from 1,002 Americans who were polled to assess their attitudes toward owning or renting homes, mortgage rates, homeownership distress, the economy, household finances, and consumer confidence.