WASHINGTON—Despite numerous predictions from housing market experts and economists that mortgage rates will rise in 2015, fewer consumers now agree.
Fannie Mae’s November 2014 National Housing Survey shows the share of Americans who expect mortgage rates to climb in the next 12 months decreased again to 45%, reflecting a gradual but uneven decline since the beginning of the year.
The results of the Fannie Mae survey show just how disconnected economists are with consumers, and vice versa, reported Housingwire.com.
The report showed that consumers’ personal financial outlook has improved in the last year, leading to further housing market recovery. However, the share of those who believe it is a good time to buy and sell a home moved further apart. Sixty-eight percent of consumers now say it is a good time buy, an increase of three percentage points, compared to 39% who say it is a good time to sell, a five-percentage-point drop.
Doug Duncan, senior vice president and chief economist at Fannie Mae, told Housingwire.com that the survey results “support the 2014 trend of gradual, but often sporadic and unspectacular, improvement across a range of indicators measuring consumer attitudes toward housing – mirroring the uneven recovery in housing activity this year. More encouraging is the steady upward trend this year in consumers’ assessment of their personal finances, with 46% of Americans – near the survey’s high – expecting their personal financial situation to improve over the next 12 months.”
Duncan added that he expects consumer attitudes toward housing to improve as the pickup in the overall economy lifts employment and income prospects. “However, a sustained improvement in sentiment that could support a robust housing recovery, as policy support is removed, will require meaningful gains in household income. While such gains have so far been elusive, the strength in the November jobs report, which points to faster growth in labor income in the current quarter, marks a good start.”
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