Improvements to the housing market have been pushing the nation towards recovery, but a new survey says some consumers remain wary.
While housing, in many parts of the country, has seen a steady stream of improvements over the last year, consumers, though more optimistic, remain wary of entering the market, according to Fannie Mae’s July 2014 National Housing Survey.
Weighing responses from upwards of 1,000 Americans, Fannie Mae’s survey revealed that 12-month home price change expectations, again, fell in July, a slight 2.3 percent decrease. And while attitudes towards the economy’s direction are growing more negative, with nearly 60 percent of consumers now believing our economy is on the wrong track, there remains a silver lining.
According to the results, the gap between consumers who think it’s a good time to buy and those who think it’s a good time to sell is shrinking, which suggests a return to better supply-demand balance.
Personal Finances Are Improving
The survey went on to provide a number of financial revelations, further suggesting that though consumers are understandably hesitant, their outlook on the market and their potential role in it is shifting.
- Falling by one percent, 54 percent of respondents believe mortgage rates will increase over the next 12 months.
- Approximately half of respondents feel it would be difficult for them to get a home mortgage today considering the current lending standards.
- 36 percent of respondents agree their household expenses are significantly higher than they were 12 months ago, which represents a two percent drop.
It’s A Slow Recovery, But Still A Recovery
One of the more imposing hurdles to determining the status of the housing market is that trends are unable to fully unfold in a handful of months. To fully understand the gravity of the situation, Doug Duncan, senior vice president and chief economist for Fannie Mae, says that we need a substantial accumulation of evidence to provide any real, concrete analysis, but adds that from what we know, things seem to be inching in a positive direction.
“The continued cautious sentiment expressed across the range of consumer indicators this month gives weight to our view that the first phase of the housing recovery is decelerating, and 2014 will be a year of mixed housing outcomes with home prices rising more slowly and home sales falling slightly,” he says. “We have always believed that for the housing recovery to be considered robust, we will need strong and sustained full-time job and income growth. Recent data indicating the creation of more than 200,000 jobs over each of the last six months, combined with this month’s improvement in the share of consumers reporting significantly higher household income than a year ago, does provide some reason for optimism. If these trends continue, they could lead to some upside in housing in 2015.”
It will be some time before we’re able to confidently say whether the nation’s market is returning to a posture of sustainable balance, but if the responses reported by Fannie Mae are any indication, we’re moving along the right trajectory.