Many people have a bad taste in their mouths over the condition of the housing market over the last few years and even though the market seems to be rebounding, consumer attitude does not seem to be doing the same. Many of the industry experts expect that home prices will rise in the next year. While some reports indicate that weather could have played a role in some states with an extended winter, others are noting that consumer attitudes are just not the same as they were a few years ago. After surveys showed how consumers feels about buying a home in January showed that confidence is falling, which has been that same way for the last four months.
Housing Recovery Expected to Press On Despite Recent Volatility in Consumer Attitudes
“Americans' outlook on housing and the economy has fluctuated somewhat during the past few months, but the trend for most indicators remains positive overall, according to Fannie Mae’s February 2014 National Housing Survey results. Notably, respondents' home price expectations climbed significantly in February – with 50 percent saying home prices will go up in the next year – following a measurable downturn in January, while the share of those who believe it is a good time to buy a home ticked up by 3 percentage points. At the same time, those who believe that it would be easy to get a mortgage dropped 7 percentage points from January's all-time survey high of 52 percent. Additionally, the share of respondents who say the economy is on the wrong track increased 3 percentage points to 57 percent in February, following a four-month decline. Despite a decrease in optimism across some of the indicators last month, consumer attitudes remain in generally positive ranges.
“Similar to the noisy economic and housing data published over the past few months, we've seen a corresponding increase in volatility in our survey results, particularly for home price expectations and perceptions about the ease of getting a mortgage,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.”
In summary, the attitudes of the consumers are certainly going to play a role in how the housing market changes in the near future. When consumers feel that the economy is picking up and the time to buy a house is now, home sale rise while repossessed homes tend to dip during those times. On the other hand, when consumers feel that the housing market is not worth getting into because of a sliding economy, the market falls and foreclosures might even pick up a bit for a month. The consumer attitude is important to the housing market because they are the ones that hold the cash. If money is not being exchanged, the overall market sees that in more ways than one.