Real Estate Economy Watch
7 February 2013
The percentage of customers signing offers in January increased by 12 percentage points according to a leading brokerage and 23 percent of Americans think it is a good time to sell compared to 11 percent the same time last year, according to Fannie Mae’s January 2013 National Housing Survey results.
Customers signing offers increased 70.4 percent in January, compared with an increase of 58.5 percent a year earlier and customers requesting home tours were up 57.9 percent in January, compared with to 52.0 percent in 2012 according to Redfin’s Real-Time Demand Pulse.
The increase in homebuyer demand seen in January paired with a nation-wide inventory shortage has created an extreme seller’s market, the brokerage said. Particularly in Redfin’s Southern California markets, bidding wars involving thirty or more offers have become increasingly common.
Fannie’s Mae’s monthly survey found that while expectations regarding personal finances stayed relatively flat, other housing indicators remained at or near survey highs, indicating consumers remain confident in the stability of the housing market.
“The housing market continues to firm, with consumer home price expectations for both rental and ownership properties near the strongest levels that we’ve seen in the survey’s two-and-a-half-year history,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Concerns about job loss are waning as payrolls are growing – a trend that may give potential homebuyers more confidence that they can meet the financial obligation of homeownership. The upward trend over the past year and a half in the share of consumers who say it’s a good time to sell may reflect two related events. First, homeowners see that home prices are improving. Second, the number of homeowners who are underwater is declining, reducing a barrier for those owners who need to sell their home in order to buy a new one.”
The average 12-month home price change expectation fell slightly from last month’s survey high to 2.4 percent.
At 41 percent, the share of those surveyed who believe home prices will go up in the next 12 months decreased by 2 percentage points from December’s survey high, while the share who believe home prices will go down returned to the survey low of 10 percent.
The percentage of those surveyed who think mortgage rates will go up decreased by 3 percentage points to 41 percent, while those who think they will go down dipped slightly to 7 percent.
Twenty-three percent of respondents say it is a good time to sell a house, up by 12 percentage points year-over-year.
At 3.7 percent, the average 12-month rental price change expectation fell 0.9 percent from last month’s survey high.
Fifty percent of those surveyed say home rental prices will go up in the next 12 months, a slight increase over December, and the highest level since the survey’s inception.
The share of respondents who said they would buy if they were going to move held steady at 65 percent.
At 39 percent, the share of respondents who say the economy is on the right track increased slightly over December.
The percentage of Americans expecting their personal financial situation to get better over the next 12 months rose by 3 percentage points to 43 percent.
Twenty-three percent of respondents say their household income is significantly higher than it was 12 months ago, holding steady from last month.
Thirty-eight percent reported significantly higher household expenses compared to 12 months ago, the highest level since December 2011.
The percentage concerned they will lose their job in the next 12 months declined 1 percentage point to 19 percent, a survey low.