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Jim Klinge
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Posted by on Jul 9, 2012 in Market Conditions, North County Coastal | 7 comments | Print Print

Feeling Better or Worse?

Adding to the mix of economic signals is Dr Doom’s call that the perfect storm scenario is unfolding.  With so many conflicting soundbites, will buyers and sellers pause around NSDCC during the second half of 2012?

1,001 people across the country are feeling OK.  The June survey from Fannie Mae:

Housing market confidence among Americans continues to trend in a positive direction despite stalling optimism about the economy and personal finances, according to results from Fannie Mae’s June 2012 National Housing Survey.

Results indicate flattening economic trends may be contributing to waning consumer expectations about their personal financial situation.  Nevertheless, Americans’ continued positive sentiment about housing appears to remain buoyed by low house prices and interest rates at historically low levels.

“While consumers remain cautious about the general economy, their attitudes toward the housing market continue to improve,” said Doug Duncan, senior vice president and chief economist of Fannie Mae.  “Although this positive trend may be short-lived if the general economy falters, one might ask whether consumers are increasingly seeing the current environment as a unique opportunity to buy a home while home prices remain depressed, rental costs are increasing, and interest rates are near historic lows.”

Respondents expect home prices to increase 2 percent in the next year, on average, and 35 percent of Americans say that home prices will go up in the next twelve months (also the highest level recorded since the survey began in June 2010).  In turn, the share of consumers who say they would buy if they were going to move increased by 6 percentage points this month (the highest level seen in the survey’s two-year history).

At the same time, 36 percent of Americans think the economy is on the right track (down 2 percentage points since May) and 57 percent think the economy is on the wrong track (up 1 percentage point). The percentage of respondents who expect their financial situation to remain the same over the next year dropped by 4 percentage points from last month to 42 percent, while only 18 percent say their household income has improved (also down 4 percentage points).


Homeownership and Renting

  • Average home price expectation hit 2.0 percent this month, a 0.6 percent increase from May and the highest value recorded since the survey began in June 2010.
  • Thirty-five percent of respondents say that home prices will go up in the next 12 months, the highest level recorded since the survey’s inception.
  • Thirty-seven percent of those surveyed think mortgage rates will go up in the next 12 months, a 4 percentage point decrease from last month.
  • The percentage who say it is a good time to buy increased slightly to 73 percent, matching the highest level recorded since the survey began two years ago, while the percentage who think it is a good time to sell remained at 15 percent.
  • On average, respondents expect home rental prices to increase by 4.0 percent over the next 12 months, generally steady since May.
  • Forty-eight percent of respondents think that home rental prices will go up in the next 12 months, while 5 percent think they will go down.
  • Sixty-nine percent of respondents said that they would buy if they were going to move, a 6 percentage point increase from last month and the highest level recorded since the survey’s inception.
  • The percentage of respondents who would rent decreased from 32 percent to 27 percent, the lowest number to date.

The Economy and Household Finances

  • The upward trend of confidence that the economy is on the right track stalled this month, leveling at 36 percent.
  • The percentage of respondents who expect their personal financial situation to stay the same over the next 12 months decreased by 4 percentage points to 42 percent, while those who expect their situation to get better steadied at 43 percent.
  • Eighteen percent of respondents say their household income is significantly higher than it was 12 months ago, a 4 percentage point decrease and the lowest value seen since November 2011.
  • Household expenses remained stable this month, with 55 percent reporting that their expenses stayed about the same as they were 12 months ago.

The most detailed consumer attitudinal survey of its kind, the Fannie Mae National Housing Survey polled 1,001 Americans via live telephone interview to assess their attitudes toward owning and renting a home, mortgage rates, homeownership distress, the economy, household finances, and overall consumer confidence.  Homeowners and renters are asked more than 100 questions used to track attitudinal shifts (findings are compared to the same survey conducted monthly beginning June 2010).  Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to stabilize the housing market in the near-term, and provide support in the future.


  1. Prof. Roubini has rarely been wrong while the government has never yet been right.

    Ditto for Greedspan and Public Enemy #1 Helicopter Bernankeeeee, in my opinion.

    Have anyone on a fixed income counting on the interest income to live ? Have you been a prudent saver and done things correctly ? Well, you’ll love this cartoon dripping in irony:



  2. I saw that but look who they quote – more college professors. When we hear it from people who have actually examined the delinquencies and compared them to the insurance-fund reserves, then I’ll be impressed.

    FHA almost doubled the insurance they are collecting, certainly they calculated that correctly….or were they just guessing? 😆


  3. Here is a good one.
    ADA, Ohio — Kelsey Griffith graduates on Sunday from Ohio Northern University. To start paying off her $120,000 in student debt, she is already working two restaurant jobs and will soon give up her apartment here to live with her parents. Her mother, who co-signed on the loans, is taking out a life insurance policy on her daughter.
    “As an 18-year-old, it sounded like a good fit to me, and the school really sold it,” said Ms. Griffith, a marketing major. “I knew a private school would cost a lot of money. But when I graduate, I’m going to owe like $900 a month. No one told me that.”
    That’s gotta hurt.


  4. The government owns the loans…I wonder what will happen before the election to get their votes?

    Anyhow my personal financial situation is trending negatively.


  5. Ms. Griffith apparently didn’t learn anything in school. $120K in student loans for a marketing degree? Seriously? I wonder how much she enjoyed her “exchange student experience” in Milan? Or London? Or….

    Parents who allow their kids to do this are morons. You cannot discharge this debt in bankruptcy. It will follow her to her grave. The money she’s paying to the banksters will never hit the economy in the form of purchasing a car, buying a house, furniture, clothing, travel…. only exacerbating the economic downturn. No one bothers to do the math on that. Student debt is a growth industry.

    And good luck finding a “marketing” job, fresh out of college, that pays much more than $30K…. many are unpaid internships… and fools take them thinking they’ll turn into a full time gig. Few do. There are the odd exceptions, but the majority, no mas.


  6. @ 3rd Gen
    Instead of counting on fixed interest to live, invest your capital in real estate and live off the rentals. Have rentals gone down in the US since the boom ended in 2008? If so have they gone down as much as interest rates?



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