The number of households saying their income is significantly higher than it was a year ago is on the rise, as is the number expecting their financial situation to continue to move significantly higher over the next year — both reaching all-time survey highs in Fannie Mae’s January 2015 National Housing Survey, a poll of 1,000 Americans’ attitudes toward owning and renting a home.
Twenty-nine percent of households say their income is “significantly higher” now than it was 12 months ago. Also, 48 percent say they expect their personal financial situation to improve over the next year.
The increases in income are translating into higher optimism about the housing market. The number of households who said it was a good time to buy a home rose 3 percentage points in January to 67 percent, according to the survey. Also, the share of households who say they’d rather buy than rent if they were to move rose 5 percentage points to 66 percent, marking the first increase since September 2014, the survey shows. What’s more, 44 percent of households now say it’s a good time to sell, tying an all-time survey high.
“Consumers are as positive about their personal finances at the start of 2015 as they have been since we launched the National Housing Survey in 2010, and this optimism seems to be spilling over into housing market attitudes,” says Doug Duncan, senior vice president and chief economist at Fannie Mae. “Consumers are more optimistic about the environment both for buying and for selling a home today, and the share who plan to own on their next move has jumped back up, reversing a three-month trend toward renting. … Overall, these are good signs to start off 2015 and are consistent with our expectation that strengthening employment and economic activity will boost the speed of the housing recovery.”
Additional findings from Fannie Mae’s January survey include:
- The majority of households believe home prices will rise over the next year, an average of 2.5 percent over the next 12 months.
- 45 percent of respondents say they believe mortgage rates will also rise over the next year, falling by 3 percentage points compared to one month earlier.
- 52 percent of respondents believe home rental prices will rise over the next year — a slight decrease month over month. The average 12-month rental price expectation fell to 3.6 percent.