Fed Actions Drive Mortgage Rate Expectations; Consumer Home Price Expectations Continue Upward Trend
The majority of Americans continue to expect no change in mortgage rates over the next 12 months, according to results from Fannie Mae's January 2012 National Housing Survey. At the same time, consumer expectations for home prices have improved for the fourth month in a row, and their overall attitudes are improving from last summer’s depressed levels – with current consumer attitudes very similar to those of a year ago.
"Consumer sentiment has continued to rebound to the level witnessed around a year ago since hitting a setback last summer. The strengthening employment picture from February 3rd provides encouragement that the improving trend in consumer confidence will continue and will at some point be reflected in a firming up of consumer spending," said Doug Duncan, vice president and chief economist of Fannie Mae. "That rebound may be slow in coming as consumers still seem to be deleveraging and aren't yet fully confident of their household finances."
"The Federal Reserve's pledge to keep interest rates low beyond 2014, extending their prior time frame of mid-2013 announced in the summer, appears to have been reflected in the rising share of consumers expecting the rate to remain near record low levels for another year," Duncan stated. "At the same time, consumers expect home prices to rise over the next year, extending the streak of rising home price expectations to four months. If the employment market continues to strengthen, it is unlikely that the Fed will be able to keep its low interest pledge for long, and a more meaningful housing recovery may not be far behind if consumers are faced with the prospect of rising mortgage rates and home prices amid increased job security."
Fannie Mae's monthly national consumer attitudinal survey report provides indicators offering a window into the opinions of Americans across the country. These behavioral insights convey what consumers think about the outlook for owning and renting a home and about their household finances, and may serve as key inputs for determining the future course of investment across housing types.
On this webpage you will find a news release with highlights from the survey results, the January 2012 Data Release highlighting eleven consumer attitudinal indicators, technical notes providing in-depth information about the survey methodology, the questionnaire used for the survey, and a comparative assessment of the Fannie Mae National Housing Survey and other consumer surveys.