Americans’ outlook toward the current home selling market and the future of home rental prices may bode well for purchase activity this year, according to results from Fannie Mae’s June 2015 National Housing Survey.
Amid continued strong job and income growth, consumers are looking more favorably on the current selling climate, perhaps portending an uptick in the existing home supply.
“Our June survey results show the positive impact on housing of job and income growth,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The expectation of higher rents is a natural outgrowth of increasing household formation by newly employed individuals putting upward pressure on rental rates. A complementary rise in the good time to sell measure suggests that limited inventory, which is putting upward pressure on house prices, gives an increasing advantage to sellers.
“Together, these results point to a healthier home purchase market, with more renters likely to find owning to be more cost-effective than renting and more sellers likely to put their homes on the market,” Duncan said.
Among those surveyed, the share who believe now is a good time to sell a home reached a new survey high, increasing three percentage points to 52% and crossing the 50-percent threshold for the first time in the survey’s history. At the same time, the share who said they expect home rental prices to go up in the next 12 months rose four percentage points to 59%, also an all-time survey high.
Here are some highlights:
The average 12-month home price change expectation fell to 2.6%.
The share of respondents who say home prices will go up in the next 12 months fell to 47%. The share who say home prices will go down rose to 7%.
The share of respondents who say mortgage rates will go up in the next 12 months rose 3 percentage points to 50%.
Those who say it is a good time to buy a house fell to 63% – tying a survey low – while those who say it is a good time to sell rose to 52% – a new survey high.
The average 12-month rental price change expectation fell to 4.2%.
The percentage of respondents who expect home rental prices to go up rose to 59% – a new survey high.