Turning point: over 50% expect home price increases

WASHINGTON – May 8, 2013 – More than half of Americans now expect the country’s home prices to climb within the next year – a growing optimism toward the health of the housing industry.

The share of respondents to Fannie Mae’s April 2013 National Housing Survey who expect home prices to go up rose another 3 percentage points in April to 51 percent. By comparison, only 32 percent had that optimistic outlook one year earlier.

“Crossing the 50 percent threshold marks a significant milestone as most Americans believe a housing recovery is truly occurring throughout the country,” says Doug Duncan, senior vice president and chief economist at Fannie Mae. In addition, the “share of Americans who think it’s a good time to sell has doubled during the last year. Many homeowners who have been underwater are gradually returning to positive equity, and selling is now becoming an available and attractive option again.”

The share of respondents who say think it’s a good time to sell remains low, but it increased 4 percentage points in April to 30 percent; one year earlier, it was 15 percent.

Survey highlights

• The average 12-month home price change expectation held steady at 2.7 percent.

• The share of people who believe home prices will go down remained at the survey low of 10 percent for the fourth month in a row.

• The share of respondents who say mortgage rates will go up fell 3 percentage points to 43 percent, while those who say rates will go down increased slightly to 7 percent.

• The average 12-month rental price change expectation held steady at 4.1 percent.

• 48 percent of those surveyed say home rental prices will go up in the next year, a 2-percentage point decrease from last month’s survey high.

• The share of respondents who said they would buy if they were going to move increased slightly to 65 percent.
SOURCE: “Turning point: Over 50% expect home price increases” FloridaRealtors.org (May 8, 2013)