In the wake of a month where consumers’ confidence in home prices remained strong even as mortgage rates leaped, more Americans may rush to buy in order to capitalize on still favorable market conditions, Fannie Mae’s chief economist said about the results of Fannie Mae’s June 2013 National Housing Survey.

“The spike in mortgage rate expectations this month seems to have had an impact on a number of the survey’s indicators and may increase housing activity in the near term by driving urgency to buy,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.

“Consumers may recognize that today’s still favorable mortgage rates and homeownership affordability levels will recede over time. Given rising home and rental price expectations and improving personal financial attitudes, more prospective homebuyers may be deciding that now is the time to get off the fence.”

With the average rate on a 30-year fixed-rate mortgage rising by well over one percentage point from early May to the end of June, the share of consumers who believed mortgage rates will increase jumped by 11 percentage points to a record high of 57 percent in June, according to Fannie Mae’s survey.

But despite growing belief in a development that would chip away at affordability, the survey still found that the share of respondents who believed home prices will go up in the next year hit a survey high of 57 percent, while those who believed that home prices would go down remained flat at a survey low of 7 percent.

Still, the average 12-month home price change expectation fell marginally from last month’s survey high of 3.9 percent to 3.8 percent, Fannie Mae reported.

Likely reflecting a recognition that rising mortgage rates may erode affordability, the share of survey respondents who believe that now is a good time to buy fell from 76 to 72 percent, while the share who say now is a good time to sell dropped from 40 to 36 percent.

Though increasing rates could spur some buyers to pull the trigger, today’s inventory shortage could continue to hold back home sales, Trulia Chief Economist Jed Kolko recently tweeted.

“People might want to buy before rates rise, but tight inventory makes it hard to find what you want fast,” he said.

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Success!
Thank you for subscribing to Morning Headlines.
Back to top
New January Connect speakers added: M. Ryan Gorman, Josh Team, Glenn Kelman and more.SEE THE SPEAKERS×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription