Americans continued to view housing as a relative bright spot in the economy, even as their sentiment towards the broader economy and household finances limped along, according to Fannie Mae’s February 2013 National Housing Survey.
Americans who believe home prices will increase over the next year and home price expectations for 2013 both hit their highest levels since the survey’s inception in June 2010, the survey found. But confidence in personal finances, household income and the health of the overall economy kept pat or dipped, according to the survey.
"Despite fiscal headwinds and political uncertainty, consumer sentiment toward housing is robust and continues to gather strength," said Doug Duncan, chief economist at Fannie Mae.
Fannie Mae said that a sizable pool of borrowers eligible for refinancing, the looming expiration of the Home Affordable Refinance Program (HARP) and an increasing expectation that mortgage interest rates will creep up are likely to spur more refinances in 2013.
"Despite historically low mortgage rates, nearly half of borrowers have never refinanced their mortgage," Duncan said. "Combined with the scheduled year-end HARP deadline, rising rate expectations should prompt some borrowers to refinance soon to take advantage of more favorable mortgage terms and add to their disposable income, helping to offset ongoing fiscal drag."
Findings of the report included:
- The 48 percent of respondents who believe home prices will go up in the next 12 months was also a survey high. The share who believe home prices will go down — 10 percent — held steady at the survey low.
- The share of respondents who said that if they were moving, they would buy rather than rent, increased by 2 percentage points to 67 percent.
- Nearly half of those surveyed — 45 percent — think mortgage rates will go up. That was an increase of 4 percentage points to the highest level since August 2011. Only 7 percent of those surveyed thought mortgage rates would go down.
- One in 4 respondents think it’s a good time to sell a house, the highest level since the survey’s inception in June 2010.
- At 38 percent, the share of respondents who say the economy is on the right track has held steady over the past three months.
- The percentage who expect their financial situation to get better over the next 12 months fell by 2 percentage points to 41 percent.
- Nearly 1 in 3 respondents — 31 percent — reported significantly higher household expenses compared to 12 months ago. But that was a 7 percentage point decrease, and the lowest level since June 2010.