Americans increasingly expect home prices and rents to increase
over the next 12 months, a trend that could push more of them
toward home ownership, according to a new survey by Fannie Mae.
"Conditions are coming together to encourage people to want to
buy homes," said Doug Duncan, Fannie Mae chief economist.
"Americans' rental price expectations for the next year continue to
rise, reaching their record high level for our survey this
"With an increasing share of consumers expecting higher mortgage
rates and home prices over the next 12 months, some may feel that
renting is becoming more costly and that homeownership is a more
compelling housing choice," Duncan said.
Nearly half of all consumers expect rents to increase over the
next year, according to Fannie Mae's March National Housing Survey,
released today. Fully one-third expect home prices to rise over the
same period, a five percent increase over February's levels and the
highest level reported in a year.
Consumers more optimistic about own finances
Meanwhile, consumers' views of their own finances have been
improving over the past three months, with 44 percent now saying
they expect their own financial situation to get better over the
On average, Americans surveyed in March said they expect home
prices to increase by 0.9 percent over the next year, with rents
anticipated to go up by 4.1 percent. Meanwhile, 40 percent said
they expect mortgage rates to rise over the next 12 months, a 5
percent increase over February's level.
Nearly three-quarters of those surveyed, 73 percent, said they
think it's a good time to buy a home, a modest increase from the
previous month. At the same time, significantly more tend to have a
pessimistic outlook about the economy rather than a favorable one,
with 58 percent saying the economy is on the wrong track versus 35
percent who say it is on the right track, attitudes that will
likely have to change significantly before the housing market shows
a strong rebound.