Lulls in employment and income growth led to a plateau in consumer sentiment in May, according to ""Fannie Mae's"":http://www.fanniemae.com/portal/index.html May 2012 National Housing Survey.[IMAGE]
The data released by Fannie Mae on Thursday showed that although many consumers (72 percent) believe that now is a good time to purchase a house, the percentage of respondents who said they would buy a house after moving actually dropped for the second consecutive month ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô 63 percent in May compared to 64 percent in April and 66 percent in March. Fifteen percent of respondents said now is a good time to sell a home.
This cautious sentiment developed in spite of other indicators that would suggest a positive trend in consumer attitude about home purchases.
Respondents expected both mortgage rates and home prices to rise in the next 12 months. Fannie Mae VP and chief economist ""Doug Duncan"":http://www.fanniemae.com/portal/about-us/company-overview/leadership/duncan.html said he believes the decrease in interested buyers falls in line with trends from the past few years.
""Our May consumer data show that Americans are taking a ├â┬ó├óÔÇÜ┬¼├ï┼ôwait and see' approach about buying or selling a home. This is not surprising given their assessment that their income during the[COLUMN_BREAK]
past twelve months and their personal financial expectation for the next twelve have leveled off,"" said Duncan. ""These data are in line with what we are seeing on the macroeconomic front, as upside and downside risks and activities are moderating one another.""
The percentage of consumers who would rent a home stayed more or less consistent with April's number (32 percent), as did the percentage who expected home rental prices to increase in the next 12 months (49 percent).
Those who anticipated rental price increases on average expected a rise of 4.1 percent over the next year, half a percentage point above April's expectations and back to March's level.
Belief that the economy is on the right track hit an all-time high among respondents in May, with 38 percent responding positively.
The percentage of consumers who expected their financial situation to deteriorate in the next year stayed steady at 12 percent, while the number of respondents who expect positive changes in their financial situations went up 2 percentage points to 46 percent.
Fannie Mae also saw a record low in respondents who say their household income has decreased significantly in the last year (15 percent). The percentage of consumers whose expenses have increased significantly also hit a record low at 32 percent, a 4-percentage point drop from April.
Despite the overall positive trend in consumer attitude about the economy, Duncan said he does not anticipate any further upturns in consumer sentiment for the next few months.
""Current jobs data are reminiscent of the spring slowdown that continued into the summer months during the last two years,"" he said. ""If this pattern continues, we do not expect to see any significant upturn in consumer sentiment during the summer, and a meaningful housing recovery likely will be delayed once again.""