The recent spike in mortgage rates hasn't dampened consumers' confidence in the housing market.
Fannie Mae’s July 2013 National Housing Survey has shown confidence in the housing market remains strong. While 62% of respondents believe interest rates will rise over the next year – a five-point jump from last month, and the highest percentage in the survey’s three-year history – consumers also expect home prices to rise by an average of 3.9% in the next year. Seventy-four percent of respondents said it was a good time to buy a house, and 40% believed it was a good time to sell.
“Consumers have taken the interest rate rise in stride. Expectations for continued improvement in housing persist, and sentiment toward the current buying and selling environment is back on track from its dip last month,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.
“These results are consistent with our own analysis of previous housing cycles, which finds that interest rates and home prices are not strongly correlated.”
Not all indicators are on their way up, however. Only 45% of respondents felt it would be easy for them to get a home mortgage, a 2-point decrease from last month, and the share of respondents who said they would buy a home if they were to move fell slightly to 64%.