Optimism Buoys National Housing Survey Results

Fannie Mae said today that its monthly National Housing Survey (NHS) portrayed increasing optimism as both employment and overall economic figures improved.  More respondents reported their own financial situations were improving and attitudes toward housing also brightened.

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.  At the same time the number of consumers who see this as a good time to buy a home rose 3 percentage points and those seeing it as a good time to sell rose 4 to scores of 67 and 44 respectively.  The latter number is an all-time survey high.

Even better news for the housing industry, 66 percent of respondents said they would buy rather than rent their next residence.  This 5 point month-over-month increase marked the first time this measure has risen since last September.

Doug Duncan, Fannie Mae's senior vice president and chief economist said, "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.  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.

Duncan said the results are consistent with another survey Fannie Mae conducts to assess lender sentiment.  Both surveys indicate that 2015 is getting off to a good start and are consistent with Fannie Mae's expectations that strengthening employment and economic activity will boost the speed of the housing recovery.

Expectations for home price increases also jumped with 49 percent expecting price hikes over the next 12 months, up 3 points, and the size of that increase rising from 2.3 to 2.5 percent.  At the same time slightly fewer respondents anticipate increases in rents, down one point to 52 percent, and the estimated size of any increase fell 5 basis point to 3.6 percent.

Finally, the right track-wrong track number has shifted significantly since November with the right track number increasing 8 percentage points over that period to 41 percent.  The gap between the two sentiments has now narrowed to 5 percentage points. 

The National Housing Survey is conducted by phone among a panel of 1,000 Americans, both homeowners and renters.  Respondents are asked more than 100 questions 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.  The survey has been conducted monthly since June 2010.