Consumer Attitudes Continue Positive Incremental Trend Despite Slow Job Growth

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News Release

May 07, 2012

Consumer Attitudes Continue Positive Incremental Trend Despite Slow Job Growth

Home Price Expectations and Share of Americans Who Think it is a Good Time to Sell Their Home Continue to Increase

Pete Bakel

202-752-2034

WASHINGTON, DC – Despite slow job growth, Americans’ attitudes about homeownership, the economy, and personal finances continue to move incrementally in a positive direction, according to results from Fannie Mae’s April 2012 National Housing Survey.  The continued stabilization of consumer attitudes coupled with growth in areas such as home price expectations, whether it is a good time to sell one’s home, direction of the economy, and the percentage of Americans who saw an increase in their personal income indicate an alignment of factors that may influence Americans’ decision making about purchasing a home.

“This month's survey shows a continued gradual improvement in consumer sentiment and outlook for home prices,” said Doug Duncan, vice president and chief economist of Fannie Mae.  “After flatlining at depressed levels for over a year, a growing share of consumers indicate that it is a good time to sell, suggesting rising optimism for the housing market.  Overall, consumer views of housing market conditions have become more supportive of home purchases, and sustained healthy hiring is required to help realize these improved expectations. Friday's report of a second consecutive setback in job creation supports the view that the housing recovery will remain uneven this year.”

On average, Americans expect home prices to increase 1.3 percent over the next twelve months (the highest value yet recorded), while the percentage of Americans who say it is a good time to sell their home continued to rise to 15 percent in April (up from low, flat levels during 2011).  In turn, confidence in the economy’s direction rose to a survey all-time high in April (hitting 37 percent, an increase of 2 percentage points from last month).  Another positive trend is the increased share of those who reported their income as “significantly higher” from twelve months ago, which is now at the highest level recorded over the past year and 7 percentage points higher than those who reported income as “significantly lower” (the largest difference between the two since the survey began).

SURVEY HIGHLIGHTS

The Economy and Household Finances

  • Confidence in the economy’s direction rose to the highest point in the survey’s two-year history this month, hitting 37 percent, an increase of 2 percentage points from last month.
  • Only 12 percent think that their personal financial situation will worsen in the next 12 months, consistent with February and March as the lowest value in more than a year.
  • Twenty-three percent of respondents saw an increase in their personal income from 12 months ago, a 2 percentage point increase from March and the highest level recorded during the past year.
  • Thirty-six percent say their expenses have increased significantly over the past 12 months, a 2 percentage point increase from last month and a return to the level recorded in January.

Homeownership and Renting

  • On average, Americans expect home prices to increase by 1.3 percent over the next 12 months, up 0.4 percentage points since last month and the highest value yet recorded.
  • Thirty-two percent of respondents expect home prices to increase over the next 12 months, a slight decline from the sharp spike last month.
  • Thirty-nine percent of Americans say that mortgage rates will go up in the next 12 months, consistent with last month’s value.
  • The percentage of Americans who say it is a good time to buy decreased by 2 percentage points to 71 percent, while the percentage of respondents who say it is a good time to sell continued to increase this month to 15 percent.
  • On average, respondents expect home rental prices to increase by 3.6 percent over the next 12 months, a 0.5 percentage point decrease versus last month.
  • Forty-nine percent of respondents think that home rental prices will go up, a 1 percentage point increase from last month and the highest number recorded to date.
  • Thirty-two percent of respondents say they would rent if they were going to move, a 2 percentage point increase from last month and the highest level since November 2011.

The most detailed consumer attitudinal survey of its kind, the Fannie Mae National Housing Survey polled 1,000 Americans via live telephone interview to assess their attitudes toward owning and renting a home, mortgage rates, 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).  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 2012 survey, as well as technical notes on survey methodology and the questions asked of respondents associated with each monthly indicator, please visit the Fannie Mae Monthly National Housing Survey site.  Also available on the site are quarterly survey results, which provide a detailed assessment of combined data results from three monthly studies. The April 2012 Fannie Mae National Housing Survey was conducted between April 4, 2012 and April 27, 2012. Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae.

Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America's secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. Our job is to help those who house America.

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