Consumers remained cautious about the housing market in December despite optimism that the economy is improving, according to Fannie Mae's National Housing Survey.
Out of 1,000 respondents polled by the Washington-based trade group, 61% said they would buy a home if they were going to move, which represents a new survey low. Conversely, the share who would rent increased three percentage points, to 34%.
Additionally, the number of respondents who believe it is a good time to buy a house fell four percentage points from November, to 64%. On the other hand, 40% think now is an opportune time to sell a property, up one percentage point from
Meanwhile, 41% of survey respondents said the economy is heading in the right direction, which is a five-percentage-point increase month over month. Those citing that the economy is worsening declined to 51%. This figure has fallen for five straight months, Fannie Mae revealed.
"It is not surprising that the housing sector continues to lag behind the rest of the economy given the long-term financial commitment that getting a mortgage represents," said Doug Duncan, chief economist at Fannie Mae. "Many prospective homebuyers want to be certain that their personal finances can withstand potential downside risks to the economy."
Other notable results from the December survey are that 46% expect home prices to rise during the next year, while 8% project home values to decline. Furthermore, 48% think mortgage rates are going to elevate in the next 12 months.
Also, the number of consumers who believe it would be easy to get a mortgage (52%) exceeded those saying it would be hard to obtain a mortgage (44%) by the widest amount in the survey's history. However, only one-quarter of respondents said their household income is significantly higher in December than 12 months earlier.
"While this is a welcome signal, softness in consumer attitudes that drive housing demand will make for a subdued recovery and should persist absent more meaningful and sustained gains in household income," Duncan said.
