Potential homebuyers may enter the purchase market sooner rather than later, responses to Fannie Mae’s latest National Housing Survey indicate.
According to the GSE’s findings, 57% of respondents expect prices will continue to rise in the next 12 months—a survey high. The share of those expecting prices will fall stayed flat at 7%.
The survey also notes a pickup in mortgage rate expectations. The number of consumers expecting rates will rise over the next 12 months spiked 11 percentage points to 57%, another survey high. Only 4% said they expect rates will drop.
Meanwhile, sentiment toward both buying and selling fell back slightly, with 72% of respondents saying now is a good time to buy and 36% saying it’s a good time to sell.
“The spike in mortgage rate expectations this month seems to have had an impact on a number of the survey’s indicators and may increase housing activity in the near term by driving urgency to buy,” said Doug Duncan, SVP and chief economist at Fannie Mae. “Consumers may recognize that today’s still favorable mortgage rates and homeownership affordability levels will recede over time. Given rising home and rental price expectations and improving personal financial attitudes, more prospective homebuyers may be deciding that now is the time to get off the fence.”
Americans’ outlook on the economy deteriorated slightly, though many were more optimistic about their personal situation. The share of people who expect their own personal financial situation to improve over the next year jumped to 46%, its highest level in three years, while 16% said they expect their situation to worsen, unchanged for the third consecutive month.