Consumer confidence in the economy is wavering, but confidence in the housing recovery remains high, according to Fannie Mae’s National Housing Survey for March.
“Despite an uptick in concern expressed about the direction of the economy, it appears consumers believe that the housing recovery will march on,” said Fannie Mae SVP and chief economist, Doug Duncan.
The percentage of people who say the economy is on the right track declined 3 percentage points in March to 35 percent. At the same time, 21 percent of people said they expect their personal financial situation to worsen over the next 12 months, a 4 percentage point rise from the previous month.
Despite this increase in pessimism, Fannie Mae found consumers continue to view the housing market with relative optimism. Forty-eight percent of survey respondents expect home prices to rise over the year, unchanged from February’s all-time high for the monthly survey, which started in June 2010.
In contrast, just 10 percent of survey respondents anticipate falling prices, an all-time low for the survey.
Another survey high was reached in response to the home-selling environment. Twenty-six percent of respondents say now is a good time to sell a home, a 1-percent increase from February.
March is the 17th consecutive month in which consumers have predicted yearly price gains. However, they have continued to predict price gains of less than three percent.
In March, consumers predicted a 2.7 percent price gain for the following year.
“By comparison, main measures of national home prices in early 2013 posted year-over-year gains of at least double or triple that figure,” Duncan said.
About 46 percent of survey respondents anticipate rising mortgage rates, while just 6 percent anticipate further declines in mortgage rates over the next 12 months.
Forty-three percent think mortgage rates will remain about the same.
By Krista Franks Brock