ATTITUDES ARE MORE POSITIVE

Survey Shows Consumer Attitudes More Positive

Just like today’s weather, with the sun trying to poke through the fog & clouds, it appears that our outlook on key economic and housing issues is getting a little brighter, too.

Fannie Mae’s February 2012 National Housing Survey shows that consumer attitudes have stabilized across most indicators such as

personal finances, housing, and employment compared to late summer and fall of 2011. The survey polled 1,003 Americans via telephone interview to assess their attitudes toward owning and renting a home, mortgage rates, homeownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts.

The most dramatic change in this recent survey revolves around the economy in general—35 percent of Americans now feel that the economy is on the right track, up 19 percentage points since November, and 57 percent think the economy is on the wrong track, down 18 percentage points since November. I’m not going to sugar-coat this, more than half of those surveyed still feel we are not on the right track, but at least that number is going down.

Americans’ confidence about personal financial situations, household income, and household expenses, as well as attitudes about homeownership and renting is holding at steady levels. Also important to note, Americans’ concerns about losing their job in the next 12 months has stabilized since the late fall, with 76 percent of Americans saying they are not concerned in February 2012, compared to 70 percent in November 2011.  Fannie Mae believes that the recent pick-up in the pace of hiring over the past few months is directly responsible for alleviating consumer concerns about unemployment.  I can also personally attest that buyers are starting to come out and home sales are up.  I’ll have those numbers soon. 

Here are some additional highlights from this survey:

Ø     Only 12 percent of respondents believe that their personal financial situation will worsen in the next 12 months, a 3 percentage point drop from January and the lowest value in over a year.

Ø      33 percent say their expenses have increased significantly over the past 12 months, a 3 percentage point decrease from last month and the lowest level in the past 12 months.

Ø      28 percent of respondents expect home prices to increase over the next 12 months (consistent with last month), while 15 percent say they expect home prices to decline (down 1 percentage point since last month).  Everyone’s waiting for the “bottom” and the sad fact is that you will only know the bottom once it has passed.  You should base your home-buying decision upon careful research & discussion with an experienced Realtor.

Ø    10 percent of Americans say that mortgage rates will go down in the next 12 months, a 2 percentage point increase from last month.  They are already at historic lows, so it’s anyone’s guess what will happen here.  This stat can also be read as “90 percent think mortgage rates will either remain the same or increase in the next year.”

Ø     The percentage of respondents who say it is a good time to sell rose by 3 percentage points to 13 percent, the highest level in over a year.

Ø      45 percent of respondents think that home rental prices will go up, a 2 percentage point increase from last month.  I’ve already received a number of calls from folks who are feeling the pinch of rents going up as much as 25 – 30 percent a month.  Rentals are hot in our area, so landlords can charge whatever the market will bear.  They are seeing the value of buying now.

If you’d like to read more for yourself, here is the link to the report:  http://bit.ly/escottfebreport

What do you think?  Are we on the right track – could we be doing something different?  Let me know!