Housing Market Losing Steam
The momentum in the housing market is losing steam as more Americans say they are feeling more cautious about the economy and their personal finances, according to Fannie Mae’s November National Housing Survey of more than 1,000 Americans.
Nearly two-thirds of Americans surveyed say they believe the economy is on the wrong track. What’s more, the number of Americans who expect their personal finances to worsen in the next year has risen to 22 percent.
Expectations about the housing market and rising home prices is also curtailing: Only 45 percent of Americans now say they think home prices will increase in the next 12 months. For those who do believe home prices will rise, they expect the increase to be 2.5 percent, down from 2.9 percent a few months ago. More Americans expect mortgage rates to rise in the next year, too.
“We continue to see caution as the defining feature of Americans’ attitudes toward the economy and their personal financial situation. In this environment, the housing recovery is likely to improve, but only at a gradual pace,” says Doug Duncan, senior vice president and chief economist at Fannie Mae. “Our November National Housing Survey results show a loss of momentum in expectations for home prices and personal finances. Also, the majority of consumers expecting higher mortgage rates implies a slowing of housing market momentum. As the economy continues to improve and household balance sheets for most Americans are slow to repair, we continue to see the transition to a full housing recovery as a slow process. Upcoming fiscal policy discussions and labor market developments may also lead to some bumps along the way.”
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Source: Fannie Mae