Housing Market Confidence Grows

A national survey by Fannie Mae found that consumers expect housing prices and mortgage rates to rise over the next year, and the current market is much better for buyers than sellers.

Consumer confidence in the returning housing market continues to grow, according to a recent national survey by mortgage-finance company Fannie Mae.

The poll of 1,001 Americans found that consumers expect home prices to increase by an average of 1.7 percent over the next 12 months. Only 10 percent of those surveyed expect prices to decline, the lowest response in that category since the survey began in June 2010.

Fifty percent of those polled believe rental prices for homes will rise in the next year, and the share of respondents that believe mortgage rates will increase added four points to reach 37 percent, after a sharp September drop.

“Increasing household formation, encouraged by an improving labor market, is adding additional momentum to the housing recovery and putting upward pressure on rental-price expectations,” said chief economist Doug Duncan. “Expected increases in both owning and renting costs may encourage more consumers to buy and add further strength to the housing recovery already under way.”

A consensus that the market belongs to buyers is widespread – 72 percent said it is a good time to buy, while only 18 percent thought selling would be smart, consistent with trends from the past six months, according to the Fannie Mae survey.