Although most Americans expect no improvement in the personal financial situation in the coming year, consumer sentiment toward housing prices turned a corner in November, according to Fannie Mae's National Housing Survey.
Respondents' home price expectations moved from negative to positive territory for the first time in six months, with survey respondents expecting home prices to increase by 0.2% over the next year.
Fannie Mae says the overall trends observed in the survey indicate that consumers are in a "wait and see" pattern going into the new year. This places consumer sentiment in line with Fannie Mae's Economics & Mortgage Market Group's November forecast of temporary economic improvement during the third and fourth quarters, leading into a slower economic growth path in 2012.
"Though their home price expectations have become slightly positive, consumers remain concerned about the direction of the economy and continue to view their household finances as being relatively flat," explains Doug Duncan, vice president and chief economist of Fannie Mae. "Most Americans expect no improvement in their personal financial situation in the next 12 months and will likely remain wary about undertaking the significant financial obligation associated with homeownership until their view of their income, expenses and job security heads in a more positive direction."
The number of respondents expecting their personal financial situation to worsen over the next 12 months has stayed at 18% since October, and only 16% of those surveyed believe the economy is on the right track, which is unchanged since September and ties the all-time-low number.
According to the survey, 22% of respondents expect home prices to increase over the next year (up three percentage points since October), while 22% say they expect home prices to decline (down one percentage point since last month). Fifty-three percent said prices will stay the same – a two-percentage-point drop from October.