Americans continue to show growing confidence in home price increases over the next 12 months, providing further indications of a slow but steady housing recovery, according to results from Fannie Mae’s October 2012 National Housing Survey. Taken together with rental price expectations, which surged in October and remain much higher than home price expectations, more consumers may be motivated to purchase a home in the coming months.
Additionally, the positive difference between those saying home prices will go up and those saying they will go down remained steady at a survey high of 26 percentage points. The percentage who believe mortgage rates will go up climbed four percentage points to 37 percent following a steep drop in September. Returning to the July 2012 level, respondents’ average rental price expectation jumped by 0.8 percent to 3.9 percent, and 50 percent believe home rental prices will rise in the next year – a three percentage point increase over last month and the highest level since the survey began.
- Consumers’ average home price change expectation edged up slightly to 1.7 percent, continuing the positive trend of the past year.
- Ten percent of those surveyed say that home prices will go down in the next 12 months, a 13 percentage point decrease since October 2011, and the lowest level since the survey’s inception in June 2010.
- After a sharp drop last month, the percentage who think mortgage rates will go up rose four percentage points in October to 37 percent.
- Seventy-two percent of respondents say it is a good time to buy, while 18 percent say it is a good time to sell, consistent with the trends seen over the past six months.
- The average rental price expectation jumped up by 0.8 percent to 3.9 percent, a return to the level seen in July 2012.
- Fifty percent of those surveyed say home rental prices will go up in the next 12 months, a three percentage point rise over last month and the highest level since the survey’s inception in June 2010.
- Nineteen percent of respondents say their household income is significantly higher than it was 12 months ago, a slight increase from last month’s total of 17 percent.
- Household expenses remained stable over the past month, with 56 percent responding that their household expenses stayed the same compared to 12 months ago.