Consumer Attitudes about Personal Finances and Housing Stabilize Alongside Positive Economic News
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Fannie Mae -- WASHINGTON, DC – Americans' concerns about key economic and housing issues are beginning to subside, according to results from Fannie Mae's February 2012 National Housing Survey. Consumers' attitudes have stabilized across most indicators – including personal finances, housing, and employment – demonstrating their sense that downside risks have abated somewhat compared to late summer and fall of 2011. While Americans' confidence in the direction of the economy has been the most pronounced (35 percent think that the economy is on the right track, up 19 percentage points since November, and 57 percent think the economy is on the wrong track, down 18 percentage points since November), their confidence about personal financial situations, household income, and household expenses, as well as attitudes about homeownership and renting is holding at steady levels. At the same time, Americans' concern about losing their job in the next 12 months has stabilized since the late fall, with 76 percent of Americans saying they are not concerned in February 2012, compared to 70 percent in November 2011.
“The pickup in the pace of hiring over the past few months has helped soothe consumer concerns, lifting their moods regarding their personal finances, the direction of the economy, and their views on the housing market,” said Doug Duncan, vice president and chief economist of Fannie Mae. “As a result, we’ve seen more potential for economic upside, creating a more balanced near-term outlook.”
The Economy and Household Finances
- The rise in confidence in the economy’s direction continued this month, with 35 percent responding that they think the economy is on the right track, a 5 percentage point increase from January. The percentage of respondents who say the economy is on the wrong track dropped to 57 percent, a decline of 6 percentage points.
- Only 12 percent think that their personal financial situation will worsen in the next 12 months, a 3 percentage point drop from January and the lowest value in over a year.
- Sixteen percent of respondents say their income is significantly lower than it was 12 months ago (down 1 percentage point since January), while 63 percent say it has stayed the same (up 1 percentage point since January).
- Thirty-three percent say their expenses have increased significantly over the past 12 months, a 3 percentage point decrease from last month and the lowest level in the past 12 months.
Homeownership and Renting
- On average, Americans expect home prices to increase by 0.8 percent over the next 12 months (down slightly since last month).
- Twenty-eight percent of respondents expect home prices to increase over the next 12 months (consistent with last month), while 15 percent say they expect home prices to decline (down 1 percentage point since last month). Fifty-three percent say prices will stay the same.
- Ten percent of Americans say that mortgage rates will go down in the next 12 months, a 2 percentage point increase from last month.
- The percentage of respondents who say it is a good time to sell rose by 3 percentage points to 13 percent, the highest level in over a year, while the percentage of respondents who say it is a good time to buy dropped 1 percentage point to 70 percent this month.
- On average, respondents expect home rental prices to increase by 3.5 percent over the next 12 months, a slight increase since January.
- Forty-five percent of respondents think that home rental prices will go up, a 2 percentage point increase from last month, while 3 percent expect them to go down, a 2 percentage point decrease from last month and the lowest value in over a year.
- Sixty-five percent of respondents say they would buy their next home if they were going to move, up 1 percentage point since last month, while 29 percent say they would rent, down 1 percentage point versus last month.
The most detailed consumer attitudinal survey of its kind, the Fannie Mae National Housing Survey polled 1,003 Americans via live telephone interview to assess their attitudes toward owning and renting a home, mortgage rates, homeownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts (findings are compared to the same survey conducted monthly beginning June 2010). Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to stabilize the housing market in the near-term, and provide support in the future.
For detailed findings from the February 2012 survey, as well as technical notes on survey methodology and the questions asked of respondents associated with each monthly indicator, please visit the Fannie Mae Monthly National Housing Survey site. Also available on the site are quarterly survey results, which provide a detailed assessment of combined data results from three monthly studies. The February 2012 Fannie Mae National Housing Survey was conducted between February 1, 2012 and February 27, 2012. Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae.