Housing Gains Ground in Minds of Consumers

Consumer attitudes about housing ended 2013 on solid footing following a slip in autumn, according to results from Fannie Mae’s December National Housing Survey.

The survey findings show less than half (49 percent) of those polled expect home prices to increase over the next year, up from 45 percent in November and 43 percent last year. Nine percent say prices will fall, a fairly flat statistic compared to both the month and the year prior.

The average price change expectation was 3.2 percent, returning to pre-government shutdown levels.

“The marked improvement in housing market sentiment over the course of 2013 bore out our view going into the year that the housing recovery was on a firm footing,” said Doug Duncan, SVP and chief economist at Fannie Mae. “Year-over-year gains in home price expectations and attitudes about the current selling environment were particularly notable.”

Bucking the consensus forecast, the number of consumers predicting mortgage rates will increase over the next 12 months fell to 57 percent, while the number of those saying rates will fall increased slightly to 4 percent.

Notably, despite industry concerns about a higher interest rate environment and tighter loan access as a result of impending regulations, consumers are more optimistic about their chances of getting a loan, with 50 percent saying they think it would be easy to get a mortgage today (compared to 45 percent last year).

“Consumer attitudes about the ease of getting a mortgage today are at their highest level in the survey’s three-and-a-half-year history, which should help offset the current higher interest rate environment and support a continued but measured housing recovery as we move through 2014,” Duncan said.

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