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January
10
10
Consumer Attitudes on Homeownership Improve in December
By Pete Bakel
Americans' attitudes on a variety of issues are marginally better than one month ago, according to results from Fannie Mae's December National Housing Survey. Despite overall low levels of optimism among Americans, consumer sentiment trended in a positive direction in the final months of 2011. Americans who say the economy is on the right track rose by 6 percentage points since November, while the percentage who say the economy is on the wrong track dropped by 6 percentage points. When asked about housing, more Americans expect home prices to increase compared to November and, on average, Americans expect home prices to increase by 0.8 percent over the next year, up from an expected 0.2 percent increase last month. On the personal finance side, for the first time since February 2011 more respondents say their financial situation will get better over the next year than say it will stay the same. In turn, the share of consumers who say their income is significantly higher than it was a year ago rose 5 percentage points since last month.
"December attitudes have rebounded from the lows seen during the debt ceiling debate and economic deterioration of Europe this past summer. There is marked improvement in consumer sentiment regarding the direction of the economy, personal finances, and future home price expectations," says Doug Duncan, vice president and chief economist of Fannie Mae. "This improvement is in line with the modest fourth-quarter pickup in the U.S. economy. However, while December results show that more Americans think the economy is on the right track, consumer attitudes are still at depressed levels, with more than two-thirds saying that the economy is on the wrong track."
The survey showed that 22 percent of Americans say the economy is on the right track (up by 6 percentage points since November). The percentage who say the economy is on the wrong track dropped to 69 percent (a decline of 6 percentage points).
For the first time since February 2011, a larger share of respondents (40 percent) say their personal financial situation will get better over the next 12 months than say it will stay the same (39 percent).
In other findings, 21 percent of respondents say their income is significantly higher than it was 12 months ago (up 5 percentage points since November), while 59% say it has stayed the same (down 7 percentage points).
Eleven percent say their household expenses have decreased over the past 12 months (up 3 percentage points since November), while 39 percent say their expenses have increased significantly. 49 percent report that their expenses are about the same compared to 12 months ago (down 5 percentage points since November).
On average, the survey concluded that Americans expect home prices to increase by 0.8 percent over the next 12 months, up from 0.2 percent in November.
Additionally, 26 percent of respondents expect home prices to increase over the next 12 months (up 4 percentage points since last month), while 18 percent say they expect home prices to decline (down 4 percentage points since last month).
Findings show that 36 percent of Americans say that mortgage rates will go up over the next 12 months, up 3 percentage points from November and even with October.
Seventy-one percent of respondents say it is a good time to buy a home (up 3 percentage points since last month), and 11 percent say it is a good time to sell.
On average, Americans expect home rental prices to increase by 3.5 percent over the next 12 months, up from 3.2 percent in November.
For more information, visit www.fanniemae.com.