Survey Shows Improvement in Consumer Attitudes

Fannie Mae conducts a monthly survey on consumer attitudes called National Housing Survey; the latest was conducted in December 2011. It was a phone survey of 1,000 Americans to assess their attitudes toward owning and renting a home, mortgage rates, homeownership distress, the economy, household finances, and overall consumer confidence.  Attitudes on some issues have improved somewhat since November 2011.

There was a 38 percent increase in those who said the economy is on the right track, but that was only 22 percent of the responders, compared to 69 percent who felt we were on the wrong track. This is the first time, since February 2011, that more thought their personal financial situation would improve over the next 12 months. More said their income was higher than 12 months ago. They expected home prices to increase by 0.8% over the next 12 months, which is an increase of 0.2% from November 2011.

“December attitudes have rebounded from the lows seen during the debt ceiling debate and economic deterioration of Europe this past summer,” Doug Duncan, vice president and chief economist of Fannie Mae, said in a press release. “However, while December results show that more Americans think the economy is on the right track, consumer attitudes are still at depressed levels, with more than two-thirds saying that the economy is on the wrong track.”

Economy and Household Finances Highlights

22 percent said the economy is on the right track, a 38 percent increase from November 2011; 69 percent said the economy was on the wrong track, a decrease of 8 percent from the prior month.

40 percent said their personal financial situation will get better over the next 12 months; 39 percent said it will be the same. This was the first time since February 2011 that more thought it would get better.

21 percent said their income is significantly higher than it was 12 months ago, a 31 percent increase from the prior month; 59 percent said it stayed the same, an 11 percent decrease from the prior month.

11 percent said their household expenses have decreased over the past 12 months, a 38 percent increase from November 2011; 39 percent said their expenses have increased significantly. 49% said their expenses are about the same compared to 12 months ago, a decrease of 9 percent from prior month.

Homeownership and Renting Highlights

On the average, they expected home prices to increase by 0.8% over the next 12 months, an increase of 0.2% from November 2011.

26 percent expected home prices to increase over the next 12 months, an increase of 18 percent from the prior month; 18% expected home prices to decline, a decrease of 18 percent. 52% expected prices to stay the same.

36 percent expected mortgage rates to increase over the next 12 months, an increase of 9 percent from November and even with October.

71 percent said it is a good time to buy a home, a 4 percent increase from the prior month; 11% said it is a good time to sell.

On the average, they expected home rental prices to increase by 3.5% over the next 12 months, a 3 percent increase from November 2011.

5 percent expected home rental prices to decrease over the next 12 months (tying May 2011 as the lowest point in the past 12 months); 43% believe home rental prices will increase.

31 percent would rent their next home; 64 percent would buy, a 2 percent increase from the prior month.

There was some improvement in overall attitude about the economy, but the majority still felt that the economy is on the wrong track.  How would you respond to this survey?

Credit Expert Witness, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.

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This post was written by John Ulzheimer