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The majority of Americans continue to expect no change in mortgage rates over the next 12 months, according to results from Fannie Mae's January 2012 National Housing Survey. At the same time, their expectations for home prices have improved for the fourth month in a row, with respondents expecting prices to go up by 1.0 percent, on average, during the year. Consumer sentiment is improving from its depressed level last summer, with current attitudes very similar to those of a year ago. Forty-four percent of respondents expect their personal financial situation to improve, up from 40 percent a month ago, and 30 percent of Americans believe the economy is on the right track, up from 22 percent last month and up for the third straight month since November 2011.

Other key highlights from the survey include:

Homeownership and Renting

• On average, Americans expect home prices to increase by 1.0 percent over the next 12 months, continuing the upward trend started in October 2011.
• Twenty-eight percent of respondents expect home prices to increase over the next 12 months (up 2 percentage points since last month), while 16 percent say they expect home prices to decline (down 2 percentage points since last month). Fifty-one percent say prices will stay the same.
• Only 8 percent of Americans say that mortgage rates will go down in the next 12 months, down 2 percentage points from December.
• The percentage of respondents who say it is a good time to buy stayed at 71 percent this month, while the percentage who say it is a good time to sell dropped by 1 percentage point to 10 percent.
• On average, respondents expect home rental prices to increase by 3.2 percent over the next 12 months, down from 3.5 percent in December.
• The same percentage of respondents as last month say rental prices will go up (43 percent), go down (5 percent), and stay the same (46 percent).
• Sixty-four percent of respondents say they would buy their next home, while 30 percent say they would rent their next home, down 1 percentage point from last month.

The Economy and Household Finances

• The percentage of respondents who say the economy is on the right track continued to rise this month, reaching 30 percent, an 8 percentage point increase since last month. The percentage who say the economy is on the wrong track dropped to 63 percent, a decline of 6 percentage points.
• A larger share of respondents (44 percent) say their personal financial situation will get better over the next 12 months than say it will stay the same (41 percent), continuing the gains seen last month.
• Seventeen percent of respondents say their income is significantly lower than it was 12 months ago (down 2 percentage points since November), while 62 percent say it has stayed the same (up 3 percentage points).
• Thirty-six percent say their expenses have increased significantly over the past 12 months, a 3 point decrease from last month and the lowest level in the past 12 months.

Source: Fannie Mae

Published with permission from RISMedia.