Consumers' Positive Financial Attitudes a Good Sign for Housing

Consumer optimism toward the housing market gained some momentum last month following a dip in December, likely getting a boost from their increasingly positive financial outlook, according to results from Fannie Mae's January 2015 National Housing Survey™. The share of respondents who said their household income is significantly higher than it was 12 months ago rose 4 percentage points to 29 percent, and the share expecting their personal financial situation to improve over the next year increased to 48 percent – both all-time survey highs. After dropping in December, the share who said it is a good time to buy a home increased 3 percentage points to 67 percent, and the share saying they would buy rather than rent if they were to move jumped 5 percentage points to 66 percent, marking the first increase since September 2014.

"Consumers are as positive about their personal finances at the start of 2015 as they have been since we launched the National Housing Survey in 2010, and this optimism seems to be spilling over into housing market attitudes," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "Consumers are more optimistic about the environment both for buying and for selling a home today, and the share who plan to own on their next move has jumped back up, reversing a three-month trend toward renting. These results are in line with lender optimism about future growth in their mortgage origination business, as shown in our Mortgage Lender Sentiment Survey™. Overall, these are good signs to start off 2015 and are consistent with our expectation that strengthening employment and economic activity will boost the speed of the housing recovery."

SURVEY HIGHLIGHTS

Homeownership and Renting

• The average 12-month home price change expectation rose to 2.5 percent.
• The share of respondents who say home prices will go up in the next 12 months rose to 49 percent. The share who say home prices will go down remained constant at 8 percent.
• The share of respondents who say mortgage rates will go up in the next 12 months decreased by 3 percentage points to 45 percent.
• Those who say it is a good time to buy a house increased to 67 percent. Those who say it is a good time to sell increased to 44 percent—tying an all-time survey high.
• The average 12-month rental price change expectation decreased to 3.6 percent.
• The percentage of respondents who expect home rental prices to go up in the next 12 months fell slightly to 52 percent.
• The share of respondents who think it would be easy to get a home mortgage today fell to 50 percent, while the share saying it would be difficult to get a mortgage rose 3 percentage points to 47 percent.
• The share who say they would buy if they were going to move rose to 66 percent, while the share who would rent decreased 5 percentage points to 29 percent.

The Economy and Household Finances

• The share of respondents who say the economy is on the right track increased by 3 percentage points to 44 percent.
• The percentage of respondents who expect their personal financial situation to get better over the next 12 months increased to 48 percent—an all-time survey high.
• The share of respondents who say their household income is significantly higher than it was 12 months ago rose 4 percentage points to 29 percent—an all-time survey high.
• The share of respondents who say their household expenses are significantly higher than they were 12 months increased to 35 percent.

The most detailed consumer attitudinal survey of its kind, Fannie Mae's National Housing Survey™ polled 1,000 Americans via live telephone interview to assess their attitudes toward owning and renting a home, home and rental price changes, 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). To reflect the growing share of households with a cell phone but no landline, the National Housing Survey has increased its cell phone dialing rate to 60 percent as of October 2014. For more information, please see the Technical Notes. 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 January 2015 survey, as well as technical notes on survey methodology and questions asked of respondents associated with each monthly indicator, please visit the Fannie Mae Monthly National Housing Survey page on fanniemae.com. Also available on the site are in-depth topic analyses, which provide a detailed assessment of combined data results from three monthly studies. The January 2015 National Housing Survey was conducted between January 1, 2015 and January 22, 2015. Most of the data collection occurred during the first two weeks of this period. Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae.