Washington, U.S.A. — Housing market confidence among Americans continues to trend in a positive direction despite stalling optimism about the economy and personal finances, according to results from Fannie Mae’s June 2012 National Housing Survey. Results indicate flattening economic trends may be contributing to waning consumer expectations about their personal financial situation. Nevertheless, Americans’ continued positive sentiment about housing appears to remain buoyed by low house prices and interest rates at historically low levels.

“While consumers remain cautious about the general economy, their attitudes toward the housing market continue to improve,” said Doug Duncan, senior vice president and chief economist of Fannie Mae. “Although this positive trend may be short-lived if the general economy falters, one might ask whether consumers are increasingly seeing the current environment as a unique opportunity to buy a home while home prices remain depressed, rental costs are increasing, and interest rates are near historic lows.”

Respondents expect home prices to increase 2 percent in the next year, on average, and 35 percent of Americans say that home prices will go up in the next twelve months (also the highest level recorded since the survey began in June 2010). In turn, the share of consumers who say they would buy if they were going to move increased by 6 percentage points this month (the highest level seen in the survey’s two-year history).

At the same time, 36 percent of Americans think the economy is on the right track (down 2 percentage points since May) and 57 percent think the economy is on the wrong track (up 1 percentage point). The percentage of respondents who expect their financial situation to remain the same over the next year dropped by 4 percentage points from last month to 42 percent, while only 18 percent say their household income has improved (also down 4 percentage points).

Survey highlights

Homeownership and Renting:

• Average home price expectation hit 2.0 percent this month, a 0.6 percent increase from May and the highest value recorded since the survey began in June 2010.
• Thirty-five percent of respondents say that home prices will go up in the next 12 months, the highest level recorded since the survey’s inception.
• Thirty-seven percent of those surveyed think mortgage rates will go up in the next 12 months, a 4 percentage point decrease from last month.
• The percentage who say it is a good time to buy increased slightly to 73 percent, matching the highest level recorded since the survey began two years ago, while the percentage who think it is a good time to sell remained at 15 percent.
• On average, respondents expect home rental prices to increase by 4.0 percent over the next 12 months, generally steady since May.
• Forty-eight percent of respondents think that home rental prices will go up in the next 12 months, while 5 percent think they will go down.
• Sixty-nine percent of respondents said that they would buy if they were going to move, a 6 percentage point increase from last month and the highest level recorded since the survey’s inception.
• The percentage of respondents who would rent decreased from 32 percent to 27 percent, the lowest number to date.

The Economy and Household Finances:

• The upward trend of confidence that the economy is on the right track stalled this month, leveling at 36 percent.
• The percentage of respondents who expect their personal financial situation to stay the same over the next 12 months decreased by 4 percentage points to 42 percent, while those who expect their situation to get better steadied at 43 percent.
• Eighteen percent of respondents say their household income is significantly higher than it was 12 months ago, a 4 percentage point decrease and the lowest value seen since November 2011.
• Household expenses remained stable this month, with 55 percent reporting that their expenses stayed about the same as they were 12 months ago.

The most detailed consumer attitudinal survey of its kind, the Fannie Mae National Housing Survey polled 1,001 Americans via live telephone interview to assess their attitudes toward owning and renting a home, mortgage rates, 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.

The Fannie Mae Monthly National Housing Survey site has detailed findings from the June 2012 survey, as well as a podcast providing an audio synopsis of the survey results and technical notes on survey methodology and questions asked of respondents associated with each monthly indicator. Also available on the site are quarterly survey results, which provide a detailed assessment of combined data results from three monthly studies.

The June 2012 Fannie Mae National Housing Survey was conducted between June 4, 2012 and June 21, 2012. Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae.

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It seems the battered US housing market has regained a sense of normality, edging more closely towards a buoyant outlook in the near future. There is an apparent bump-up in home sales for the month of April, making a crack in the ongoing low-sales trend over the last months.

Data corresponding to April presented something that fills the vacuum of uncertainty with hope. According to the National Association of Realtors report, sales of existing homes rose 4.6 percent in April. This creates an annualized rate of 3.4 million units, following a fall in February and March.

Paul Diggle, a property Economist of Capital Economics, said ‘The rise in existing home sales in April suggests that the modest recovery in the housing market is back on track.’

April  home sales figures weren’t high enough to surpass sales spikes recorded when the first time home-buyer credit program was in operation; nevertheless, it is a healthy sign indicating a chance of the housing market gaining momentum. Sales of existing homes increased in all regions with the North-east recording 5.1 percent growth, the West a 4.4 percent growth and the South a 3.5 percent growth.

An economist surveyed by the Dow Jones Newswires had predicted that home sales would rise by 2.7 percent on a monthly basis from previously reported March figures.

Steven Ricchiuto, Chief Economist at Mizuho Securities USA, Inc., said ‘the increasing pace of sales had pulled more homes on the market and many of these are higher-priced homes that had not been selling.’

Distressed properties make up 28 percent of the total sales of existing homes, a clear fall of almost 10 percent on the year over year (YOY) basis, and a percent lower than the March 2012 sales of 29 percent.

The ailing housing market was greatly responsible for crafting the recession during 2007 and 2008; it sparked bits of deadly fire, which eventually engulfed the US economy.  Joel Naroff, chief economist at Naroff Economic Advisors, said ‘as pick up, we should start seeing better levels of starts and that would mean more construction jobs.’

Jeremy Lawson, a Senior Economist at BNP Paribas in New York, said, ‘Even though we have seen home prices start to turn, our concern is that in the second half of the year as more foreclosures come into market, we could see a dip in prices.’

Strands of thought may differ because of underlying analogy and exercise of logic between two different people, but the bottom-line is clear. There is some positive activity in the housing market that may continue in near future.

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The housing industry is staging a recovery with increasing sales and stabilizing prices, according to a national survey of RE/MAX agents.  Four out of five agents believe U.S. home prices won’t decline further. In fact, nearly 70% predict prices will go up, led by a strong demand for homes in the low to middle price ranges.

“To active real estate agents, this market is definitely heating up,” said Margaret Kelly, RE/MAX CEO.  “They are witnessing a recovery across the country fueled by home buyers and sellers taking advantage of a significant market opportunity.”

Agent opinions are documented in the quarterly RE/MAX Market Insights, an online survey of 1,022 residential experts. Collectively, RE/MAX agents sell more real estate than any other real estate network in the U.S.

Key findings include:

• Price rebound: 68% say prices will be higher by the end of 2012.
• Today’s prices: 29% below the peak reached during the housing bubble.
• Demand for lower-priced properties: 80% of agents say it’s good or very good.
• Demand for homes in the middle-price ranges: 71% rate it as fair to good.
• Demand for high-priced homes: 58% call it poor to fair.

A snapshot of today’s homebuyers served by RE/MAX agents:

• Roughly one third are first-time buyers. Another third are homeowners looking to sell so they can move up or downsize. The remainder are mostly investors, who believe the market has hit bottom.
• One in five buyers pays cash, receiving an average discount of 15%.

The most significant challenges facing first-time homebuyers are having an acceptable credit score, posting a down payment, and facing a shortage of homes for sale. Repeat buyers have the added burden of selling their current home. They, too, are facing a scarcity of homes to purchase in the lower and middle price ranges.

Nearly half of the agents say lower priced homes in their markets are selling for slightly less than the asking price, while 17% say buyers are paying full price and 11% say buyers are paying slightly more than the asking price.

For homes in the middle-price ranges, 49% report sale prices are slightly less than the asking price, while 8% say full-price is being paid. For the high-priced homes, 43% report that sale prices are moderately less than asking prices, with another 25% saying it is slightly less.

With bank-owned homes making up a significant portion of the current inventory, agents report that 62% of their non-investor buyers have a favorable attitude toward foreclosures, while only 27% have a favorable attitude toward short sales.

“With distressed properties still making up a sizeable portion of homes on the market, this inventory is being cleared effectively by buyers, who don’t mind investing a little to fix up a property in return for an attractive bargain,” Kelly added.

Among buyers’ highest priorities were quality of schools, and condition and size of the home. The lowest priorities included public transportation, walkability and energy efficiency.

Most RE/MAX agents advise their buyers to hire a professional home inspector and to attend the inspection. Getting pre-approved for a mortgage, not merely pre-qualified, also is recommended.

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