Consumer expectations on home prices rose unexpectedly in February, just in time to build seller confidence to list their houses and restore tight inventories for the fast approaching spring season.
Fannie Mae’s February 2014 National Housing Survey took a right turn from January’s results as respondents’ home price expectations climbed significantly – with 50 percent saying home prices will go up in the next year – following a measurable downturn in January.
The share of those who believe it is a good time to buy a home ticked up by 3 percentage points. At the same time, those who believe that it would be easy to get a mortgage dropped 7 percentage points from January’s all-time survey high of 52 percent.
Additionally, the share of respondents who say the economy is on the wrong track increased 3 percentage points to 57 percent in February, following a four-month decline. Despite a decrease in optimism across some of the indicators last month, consumer attitudes remain in generally positive ranges.
“Similar to the noisy economic and housing data published over the past few months, we’ve seen a corresponding increase in volatility in our survey results, particularly for home price expectations and perceptions about the ease of getting a mortgage,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Weather may have played a role, as suggested by a 6 percentage point jump over the past two months in the share of consumers who say their household expenses are significantly higher than a year ago. This response would be consistent with higher home heating costs. Despite the volatile month-to-month changes, we believe that the housing recovery is continuing, but is not yet robust.”