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Fannie Mae Releases New Research Study: Renters Are Satisfied, but Continuing to Reach for Homeownership

Pete Bakel

WASHINGTON, DC – Fannie Mae’s Economic & Strategic Research Group today released a new research study that investigates the impact of consumer attitudes toward renting and homeownership on the future of housing in America. Data from Fannie Mae’s National Housing Survey provides insights into whether current renters, particularly younger Americans, aspire to become homeowners and when they expect to achieve the goal of homeownership. Findings show:

  • Ninety percent of aspiring owners expect to purchase a home in the future, even though most have ranked their renting experience favorably.
    • Renters who prefer to own appear to have a sense of measured optimism about their homeownership prospects, although most believe it would be difficult to get a mortgage today.
  • Forty-two percent of those who expect to buy believe that they will not be able to do so for at least five years.
    • Despite the hurdles renters anticipate on the path to homeownership, many say they are renting now primarily as a stepping stone toward making that move in the future.
    • Younger renters aged 18 to 34 are nearly twice as likely to say their main reason for renting is to prepare financially for future ownership, compared to renters aged 35 and up.

For more detailed findings from the National Housing Survey Topic Analysis Report, including an FM Commentary from research author Sarah Shahdad, click here.

Fannie Mae’s Topic Analysis Reports provide deeper insights into one or more housing issues based on the compilation of three monthly National Housing Survey samples. The National Housing Survey polls more than 1,000 homeowners and renters each month to assess their attitudes toward owning and renting a home, the current state of their household finances, views on the U.S. housing finance system, and overall confidence in the economy. The three monthly survey studies that make up any given Topic Analysis Report are identical in wording and placement of questions.

Opinions, analyses, estimates, forecasts, and other views of Fannie Mae’s Economic & Strategic Research (ESR) Group included in these materials should not be construed as indicating Fannie Mae’s business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR Group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.Fannie Mae enables people to buy, refinance, or rent a home.

Visit us at: http://www.fanniemae.com/progress.

 

 

June 2013 Survey Report

Consumer Mortgage Rate Expectations Spike as Buying and Selling Sentiment Wane; Outlook on Housing and Finances May Spur Potential Homebuyers to Act

Potential homebuyers may enter the purchase market sooner rather than later as more Americans expect mortgage rates and home prices to climb, according to results from Fannie Mae’s June 2013 National Housing Survey. The share of respondents who say mortgage rates will go up during the next 12 months jumped 11 percentage points to 57 percent, the highest level in the survey’s three-year history. Meanwhile, consumers’ home price expectations have stayed strong in the face of rising mortgage rates. The share of respondents who believe home prices will go up in the next year also hit a survey high of 57 percent, while those who say prices will go down stayed steady at 7 percent. Although sentiment toward both the current home buying and selling environments retreated slightly, it remains near the survey highs of last month, with 72 percent saying it is a good time to buy and 36 percent saying it is a good time to sell.

Monthly Housing Survey

“The spike in mortgage rate expectations this month seems to have had an impact on a number of the survey’s indicators and may increase housing activity in the near term by driving urgency to buy,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Consumers may recognize that today’s still favorable mortgage rates and homeownership affordability levels will recede over time. Given rising home and rental price expectations and improving personal financial attitudes, more prospective homebuyers may be deciding that now is the time to get off the fence.”

Among those surveyed, 56 percent say rental prices will go up during the next year – an 8 percentage point increase and the highest level since the survey’s inception – and the average 12-month rental price change expectation jumped 1.2 percent to 4.6 percent. Americans’ outlook on their personal finances also increased significantly in June. The share who expect their personal financial situation to improve during the next year climbed to 46 percent, the highest level since June 2010. The share who say their household income is significantly higher than it was 12 months ago jumped 6 percentage points to a survey high 26 percent.

Fannie Mae’s monthly national consumer attitudinal survey report provides indicators offering a window into the opinions of Americans across the country. These behavioral insights convey what consumers think about the outlook for owning and renting a home and about their household finances, and may serve as key inputs for determining the future course of investment across housing types.

On this webpage you will find a news release with highlights from the survey results, the June Data Release highlighting 11 consumer attitudinal indicators, a podcast containing highlights from this month’s survey, technical notes providing in-depth information about the survey methodology, the questionnaire used for the survey, and a comparative assessment of the Fannie Mae National Housing Survey and other consumer surveys.

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