Survey: More Consumers Say Now Is a Good Time to Sell
In Fannie Mae’s most recent housing survey, consumers maintained their optimism toward home prices, while the share of consumers who said now is a good time to sell reached a record high. However, consumers in the survey were less optimistic about the economy and their own financial situation.
Nearly half, or 48 percent, of respondents in the February survey said they expect home prices to rise in the next 12 months, up from 45 percent in January. On average, consumers expect prices to rise by 2.9 percent over a year, up from 2.4 percent the month before.
Seventy-three percent of respondents said now is a good time to buy, an increase from 69 percent the month before. At the same time, 25 percent also believe now is a good time to sell, the highest level since the survey’s June 2010 inception.
“Despite fiscal headwinds and political uncertainty, consumer sentiment toward housing is robust and continues to gather strength,” said Doug Duncan, SVP and chief economist at Fannie Mae. “We expect home prices to firm further amid a durable housing recovery, gradually reducing the population of underwater borrowers and helping to boost the share of consumers who say that now is a good time to sell.”
Along with the increase in prices, more consumers also think mortgage rates will go up, with 44 percent of respondents expressing this view last month compared to 41 percent in January. Only 7 percent believe rates will go down.
With the year-end HARP deadline looming ahead, Duncan explained rising rate expectations should prompt some borrowers to refinance soon to take advantage of more favorable mortgage terms. As a result, Duncan said this should “add to their disposable income, helping to offset ongoing fiscal drag.”
As for views on rent prices, 50 percent of consumer expects rent prices to go up in the next 12 months, unchanged from the month before and at the highest level since the survey began.
A large majority of respondents, 67 percent, said they would buy if they were to move rather than rent, up from 65 percent the month before.
When asked about the economy, 53 percent of respondents said the economy is on the wrong track, unchanged from January.
Consumers were more pessimistic about their personal financial situation, with 41 percent believing it will get better, down from 43 percent the month before. More respondents said they think their financial situation will stay the same, with 41 percent of consumers expressing this view, up from 37 percent.
The share of respondents who said their household income is significantly higher compared to a year ago decreased over the month to 21 percent from 23 percent. However, 31 percent said their expenses are significantly higher, down from 38 percent in January.
Fannie Mae’s survey polled a representative sample of over 1,000 respondents.
