Americans are increasingly optimistic about the housing market, despite the threat of a continued rise in mortgage rates, a new survey shows. Fifty-three percent of Americans expect home prices to increase by an average of 3.9 percent over the next 12 months, according to Fannie Mae’s July National Housing Survey of 1,000 home owners. Only 6 percent expect prices to fall, a new low in the survey’s three-year history.
Seventy-four percent of those surveyed say now is a good time to purchase a house, and 40 percent say now is a good time to sell. But consumers are bracing themselves for higher mortgage rates: 62 percent of survey respondents say they expect rates to rise over the next year, while only 5 percent expect them to fall.
“Consumers have taken the interest-rate rise in stride,” says Doug Duncan, Fannie Mae’s chief economist. “Expectations for continued improvement in housing persist, and sentiment toward the current buying and selling environment is back on track from its dip last month. These results are consistent with our own analysis of previous housing cycles, which finds that interest rates and home prices are not strongly correlated.”
Source: “Fannie Mae says Consumers Taking New Interest Rates in Stride,” Mortgage News Daily (Aug. 7, 2013)