American Consumers Anticipate Rising Home Prices

By Stevie Duffin Updated on 1/7/2013

By Daniel Duffield

Last month, consumer confidence rose in terms of the housing market outlook, consisting of an optimistic opinion on the future of home prices, rental prices, and mortgage rate predictions, according to data from the Fannie Mae December National Housing Survey. With this rise in homeowner and borrower confidence amidst positive indicators for 2013, a surge in home purchases could be seen within early 2013; although, despite this confidence regarding the housing sector, may consumers still hold many reservations about the economy and personal finances in general after November optimism was disrupted temporarily by the fiscal cliff talks.

According to Doug Duncan, senior vice president and chief economist of the government sponsored enterprise (GSE) Fannie Mae, the majority of consumers within the survey anticipate rising home prices for the next twelve months, a viewpoint which aligns with Fannie Mae expectations of growing home prices on the national level. As a result of expectations regarding increasing rental prices and mortgage rates, consumers may be more willing to purchase a home rather than wait to see how the current market trends will play out, further stimulating the housing recovery. Duncan continued that, although the housing market has grown more stable, consumers have lost a degree of confidence over the fiscal cliff discussions of late December and the upcoming debt ceiling issue, which have contributed to a view of the economy as a whole as increasingly volatile. Consequently, consumer uncertainty has grown in areas outside of housing, primarily with respect to national economic growth and personal financing.

The aforementioned Fannie Mae National Housing Survey, the most thorough survey for consumer attitudes, polled 1,002 Americans through telephone interview to determine their opinions and outlook in terms of home purchase, rental, mortgage rates, hardship for homeowners, the overall economy, personal financing, and confidence levels. Homeowners and renters were posed 100 questions used to assess any shifts in sentiment from the previous survey which was conducted in June 2010. Fannie Mae utilizes this survey in order to provide industry affiliates with valuable information in an effort to stabilize the housing market and provide better support as a government enterprise.