Americans are feeling pretty good about their home prices these days, but they’re worried about interest rates and the economy. According to a Fannie Mae National Housing Survey conducted last month, although more consumers than ever believe that home prices will rise in the next 12 months, they’re also pretty worried about mortgage rates, their financial situations, and household incomes. In fact, the percentage of Americans who say mortgage rates are set to rise is the highest measured since August 2011 (45 percent). Only seven percent believe mortgage rates will fall. Oddly enough, this is not leading to the volume of refinancing that one might expect; this could be due to the difficulty of refinancing or even simply a perceived difficulty in this arena.
Consumers expect home prices will rise about three percent in 2013, and most believe that this will be the beginning of a positive trend in housing. Likely as a result of these positive sentiments, more than two-thirds (67 percent) said that if they were moving they would purchase a home. Unfortunately, if consumer sentiment about ability to purchase a home is any indication, two percent fewer would-be homeowners will be able to do so, as 41 percent (down from 43) of the population expect their financial situation to improve this year.
Do you think that these consumers know what they are talking about? Is there a real recovery going on and can it last?
By Carol VanSickle