Fannie Mae: Fewer Expect to Buy Despite Record Low Rates

The number of prospective home buyers has declined for three straight months, despite average mortgage rates setting new lows on a regular basis throughout the same time period.
But the “wait and see” attitude among many Americans toward buying a home is more the result of a flattening economic recovery and skittishness over the jobs market, according to Fannie Mae’s May 2012 National Housing Survey.
The percentage of respondents who would buy a home is down to 63 percent in May, from 64 in April and 66 percent in March.
“Our May consumer data show that Americans are taking a ‘wait and see’ approach about buying or selling a home,” said Doug Duncan, vice president and chief economist of Fannie Mae. “This is not surprising given their assessment that their income during the past twelve months and their personal financial expectation for the next twelve have leveled off.”
The leveling of consumer attitudes can be seen in Americans’ inclination to buy – versus renting – their next home despite some mildly housing positive trends.
Forty-one percent of survey respondents expect home mortgage rates to go up in the next twelve months – a slight increase from last month.  However, rates have shown no signs of reversing, quite the contrary. National mortgage rate averages have set record lows for six straight weeks.
At the same time, Americans expect home prices on average to increase 1.4 percent over the next twelve months, (up from 0.9 percent in March 2012 and the highest value yet recorded.
The percentage of respondents who would rent if they were going to move is unchanged at 32 percent in May, while 63 percent would buy.
“Current jobs data are reminiscent of the spring slowdown that continued into the summer months during the last two years,” Duncan said. “If this pattern continues, we do not expect to see any significant upturn in consumer sentiment during the summer and a meaningful housing recovery likely will be delayed once again.”

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