Consumer fears over economy slow housing activity
WASHINGTON – June 9, 2014 – Americans' concerns about the direction of the economy and their household income appear to be weighing on housing growth, according to results from Fannie Mae's May 2014 National Housing Survey.
The share of respondents who still believe the economy is headed in the wrong direction remained at 57 percent last month, and those who said their household income is significantly higher than it was at the same time last year decreased four percentage points to 21 percent.
Although respondents' attitudes toward housing have been generally positive during the past few months, their reluctance to enter the home buying or selling market has restrained activity below typical seasonal trends.
"Consumers' lukewarm income expectations and reticence about the economy seem to be holding back housing demand," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "This year's spring and summer home buying season has gotten off to a slow start, even as mortgage rates have trended lower over the past two months.
"Our National Housing Survey data show that economic conditions continue to be the top concern among consumers who think it's a bad time to buy or sell a home. While recent housing activity suggests that the worst of the housing slump may be behind us, this caution among consumers supports our expectation that the rebound in home sales will likely be too modest to pull sales for all of 2014 ahead of last year."
Survey highlights include:
Homeownership and renting
Economy and household finances
The most detailed consumer attitudinal survey of its kind, the Fannie Mae National Housing Survey polled 1,000 Americans via live telephone interview to assess their attitudes toward owning and renting a home, home and rental price changes, homeownership distress, the economy, household finances and overall consumer confidence.
Homeowners and renters are asked more than 100 questions used to track attitudinal shifts (findings are compared to the same survey conducted monthly beginning June 2010).
The May 2014 Fannie Mae National Housing Survey was conducted between May 1, 2014 and May 21, 2014.
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