The increase was bolstered by a series of mortgage rate decreases throughout the summer. Consumer attitudes about the economy also improved substantially last month, breaking the progression of waning confidence seen during much of the year.
“Home price change expectations have remained positive for 11 straight months, and the share expecting home price declines has stabilized at a survey low of only 11 percent,” says Doug Duncan, senior vice president and chief economist of Fannie Mae. “Furthermore, the Federal Reserve’s latest round of quantitative easing has caused a large drop in mortgage rate expectations. Friday’s September jobs report – including the strong upward revisions for prior months, a sizable increase in earnings, and a sharp decline in the unemployment rate – should provide further impetus for improving consumer confidence in the housing market.”
With regard to the overall economy, 41 percent of consumers now believe the economy is on the right track, up from 33 percent last month; and 53 percent believe the economy is on the wrong track, compared with 60 percent the prior month. Both the right track and wrong track figures mark their highest and the lowest readings, respectively, since the survey began in June 2010.
Homeownership and renting
• Consumers’ average home price change expectation is 1.5 percent, consistent with recent periods and marking nearly a full year in which home price expectations have been positive.
• Thirty-seven percent expect home prices to go up in the next year, the highest level since the survey’s inception in June 2010.
• Thirty-three percent of respondents say mortgage rates will go up in the next year, a decrease of 7 percentage points since last month.
• Nineteen percent of respondents say it is a good time to sell, the highest level since the survey’s inception.
• Those who say now is a good time to buy dipped slightly to 72 percent.
• The percentage of respondents who say they would buy if they were going to move increased to 69 percent, tying June 2012 at the highest level since the survey’s inception.
The economy and household finances
• Consumer optimism climbed in September, with 41 percent saying the economy is on the right track – the highest level recorded since the survey began, and an 8 percentage point increase over last month.
• Forty-four percent of respondents expect their personal financial situation to improve over the next year, up from 42 percent in August.
• The share of respondents who say their household income is significantly higher than 12 months ago decreased 3 percentage points to 17 percent.
• Thirty-four percent say their household expenses are significantly higher than they were 12 months ago, a 2-percentage point increase over August.
Article can be found at Fannie Mae