American consumers are feeling more positive about the U.S. housing market, according to government-backed mortgage giant Fannie Mae, a sign that home sales and inventory may increase in coming months.
The Fannie Mae October 2014 National Housing Survey found that the number of people who believe it is a good time to sell a home rose to 44 percent, a new all-time high in the survey’s four year history. Consumers still think the housing market is more of a buyers’ market as 65 percent said it is a good time to buy, but that percentage was a decrease from last month.
“Home price expectations rose significantly this month, largely reversing the dip witnessed over the past four months, and the share of consumers who think it’s a good time to sell a home reached another survey high,” said Fannie Mae senior vice president and chief economist at Fannie Mae Doug Duncan. “The narrowing gap between home buying and home selling sentiment may foreshadow increased housing inventory levels and a better balance of housing supply and demand. These results may help drive a healthier housing market in 2015.”
The survey also reported that 44 percent of consumers think home prices will rise in the next 12 months and only 7 percent of respondents believe home prices will fall. And the percentage of people who think mortgage rates will increase in the next year rose to 48 percent from 45 percent in September.
The growing confidence in the housing market may also stem from greater faith in their personal financial situation. Forty-five percent of respondents said they expect their own financial condition to improve in the next 12 months. That’s up from only 38 percent a year ago. In October only 10 percent think their finances will deteriorate in the next year. And 25 percent of Americans say that their financial situation actually did significantly improve over the past 12 months.
“Consumers are growing more optimistic about the housing market in the face of broader improvement in economic sentiment,” said Duncan. “The share of consumers who expect their personal finances to get better is near its highest level since the survey’s inception, while those expecting their finances to get worse reached a survey low.”