Consumers Feel Good about Mortgage Credit
By Pete Bakel
More Americans now believe it would be easy for them to get a mortgage, according to Fannie Mae’s January 2014 National Housing Survey results. Consumer attitudes regarding the ease of getting a mortgage climbed 2 percentage points to an all-time survey high of 52 percent, while those who think it would be difficult dropped 3 points to 45 percent. This indicates that consumers perceive that mortgage credit is more accessible. Even though this month’s survey shows a more moderate expectation for home price gains within the next 12 months, the view that mortgage credit is more available may allow for continued but measured improvement in the housing recovery.
Consumer attitudes toward the economy also improved in January despite downbeat jobs data for the past two months. The share of consumers who believe the economy is on the right track climbed 8 percentage points to 39 percent, while the share who believe it’s on the wrong track declined to 54 percent. Additionally, the share who expect their personal financial situation to improve in the next year increased to 44 percent, continuing an upward trend since November 2013.
“A majority of consumers now believe that it is getting easier to get a mortgage. For the first time in the National Housing Survey’s three-and-a-half-year history, the share of respondents who says it is easy to get a mortgage surpassed the 50-percent mark, exceeding those who say it would be difficult by 7 percentage points,” says Doug Duncan, senior vice president and chief economist at Fannie Mae. “The gradual upward trend in this indicator during the last few months bodes well for the housing recovery and may be contributing to this month’s increase in consumers’ intention to buy rather than rent their next home. The dip in overall home price expectations, though notable, is consistent with our view of moderating home price gains this year from a robust pace last year, while positive trends in perceptions about the economy and personal finances over the next year support our view of stronger growth in the broader economy.”
Homeownership and Renting
• The average 12-month home price change expectation decreased from last month, to 2.0 percent.
• The share of people who say home prices will stay the same in the next 12 months increased 7 percentage points to 45 percent, while the share who say home prices will go up in the next 12 months fell by 6 percentage points to 43 percent.
• The share of respondents who say mortgage rates will go up in the next 12 months decreased by 2 percentage points, to 55 percent.
• Those who say it is a good time to buy a house decreased from last month, down 2 percentage points to 65 percent.
• Those who say it is a good time to sell a house increased 5 percentage points from last month to 38 percent.
• The average 12-month rental price change expectation decreased from last month to 2.8 percent, tying the all-time survey low.
• Forty-eight percent of those surveyed say home rental prices will go up in the next 12 months, a decrease of 5 percentage points from last month.
• Fifty-two percent of respondents thought it would be easy for them to get a home mortgage today—an all-time survey high.
• The share of respondents who says they would buy if they were going to move hit an all-time survey high of 70 percent, and those who say they would rent is at an all-time low of 26 percent.
The Economy and Household Finances
• The share of respondents who say the economy is on the right track increased 8 percentage points from last month, to 39 percent.
• The percentage of respondents who expect their personal financial situation to get better in the next 12 months increased over last month to 44 percent.
• The share of respondents who say their household income is significantly higher than it was 12 months ago decreased slightly to 22 percent.
• At 32 percent, the share of respondents who say their household expenses are significantly higher than they were 12 months ago rose 2 percentage points from last month.
One of the most detailed consumer attitudinal surveys of its kind, the Fannie Mae 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). 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 more information, visit http://www.fanniemae.com/progress.