In May, Americans got a lot more optimistic about the housing market.
Both the share of Americans who believe now is a good time to sell and the share of Americans who think now is a good time to buy rose sharply from April to May, with widespread reports of rising home prices, according to Fannie Mae.
The share of respondents who say now is a good time to sell jumped 10 percentage points in May, rising from 30 to 40 percent on a monthly basis, according to the results of Fannie Mae’s May 2013 National Housing Survey.
That indicates that the number of sellers confident in the housing market has more than doubled in the last year. Just 16 percent said “now is a good time to sell” in April 2012.
“Sentiment toward selling a home appears to be catching up with the strengthening housing market,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The share of consumers who think it’s a good time to sell a home spiked this month, the largest increase in the survey’s three-year history.”
“This jump may foreshadow a gradual return to more normal levels of housing supply from their lows of recent months. In turn, increased housing supply could serve to temper increasing consumer home price expectations. We will closely watch the potential impact of rising mortgage rates on consumer housing sentiment in the coming months.”
The survey also found that the share of respondents who said now is a good time to buy hit a record high, rising by 5 percentage points to 76 percent.
Respondents’ average 12-month home price change expectation also hit a survey high, leaping from 2.7 percent in April to 3.9 percent in May.
What’s your take? Is consumer sentiment catching up with strong housing market fundamentals, or are expectations getting ahead of the curve? Leave your comments ahead.