Buyers, Sellers Show Reluctance to Act Now
Despite favorable attitudes toward the housing market in recent months, Americans are showing reluctance to buy or sell, which has restrained activity below typical seasonal trends, according to Fannie Mae’s May 2014 National Housing Survey.
“Consumers’ lukewarm income expectations and reticence about the economy seem to be holding back housing demand,” says Doug Duncan, chief economist at Fannie Mae. “This year’s spring and summer homebuying season has gotten off to a slow start, even as mortgage rates have trended lower over the past two months.”
Economic conditions continue to be the top concern among consumers who say it’s a bad time to buy or sell a home, according to Fannie Mae’s survey.
“While recent housing activity suggests that the worst of the housing slump may be behind us, this caution among consumers supports our expectation that the rebound in home sales will likely be too modest to pull sales for all of 2014 ahead of last year,” Duncan says.
The survey of about 1,000 Americans also found:
- 43 percent say now is a good time to sell a house, a new all-time high for the survey.
- 68 percent say now is a good time to buy a home, a slight drop from last month.
- The average 12-month home-price change expectation held at 2.9 percent, unchanged from last month. Forty-eight percent of consumers surveyed say they expect home prices will rise in the next 12 months, a slight drop from last month.
- 51 percent say they expect home rental prices to rise in the next 12 months. The average 12-month rental-price change expectation fell slightly to 3.9 percent.
- 49 percent say they thought it would be easier for them to qualify for a home mortgage, a rise of 4 percentage points from last month.
- 42 percent say they expect their personal financial situation to improve over the next 12 months.
- 21 percent say their household income is significantly higher than it was 12 months ago, a decrease of 4 percentage points from last month.
Source: Fannie Mae