Consumers Mixed on Housing, Economic Sentiment

Consumer attitudes toward the housing market deteriorated slightly in June, reflecting a more subdued outlook as the sector pulls out of its early-year slump.

Looking ahead to the next 12 months, 46 percent of Americans polled expect home prices to rise, Fannie Mae reported in its latest National Housing Survey. That share is down from 48 percent in May and 50 percent in April.

On average, respondents anticipate a home price change of 2.4 percent, down half a percentage point from the previous two surveys and the lowest forecast since January, when news of a slowdown in price gains affected attitudes.

Additionally, the share of respondents who said they expect mortgage rates to rise over the next year increased to 55 percent, ending a downward trend that began in February.

"The uptick this month in the share of consumers expecting mortgage rates to go up and the accompanying decline in home price expectations reflect the pause of activity in the housing market so far this year," said Doug Duncan, chief economist at Fannie Mae. "Despite recent improvement, we now expect an annual decline in existing home sales due to weak volume in the first four months of the year associated with the rise in mortgage rates mid-last year and the current dearth of supply of lower-priced homes."

In brighter news, 52 percent of consumers surveyed said they think it would be easy for them to get a home mortgage today, matching the survey's record high.

At the same time, the share of employed respondents who expressed concerns about their job security dropped to an all-time survey low, Duncan reported—consistent with June's encouraging jobs report.

"This may encourage potential homebuyers to enter the purchase market in 2014, helping to offset some of the weakness in sales activity," he added.

Overall, 39 percent of Americans polled said the economy is on the right track, up slightly from May, though more than half said it's still on the wrong track.

There was also a slight uptick in the share of respondents whose household income has risen "significantly" over the past year, accompanied by an increase in the share whose expenses have risen.