Another downturn in consumer attitudes has spurred analysts at Fannie Mae [1] to rein in their outlook for the housing market in 2015.
Despite economic strides made in the last few months, the company's latest National Housing Survey [2] found Americans' outlook toward housing deteriorated in August for a second straight month, "[suggesting] that housing activity may resume its modest recovery in 2015 after some pullback last year," analysts said.
"The August National Housing Survey results lend support to our forecast that 2015 will likely not be a breakout year for housing," said Doug Duncan, SVP and chief economist at Fannie Mae.
Asked about their home price expectations over the next year, consumers surveyed in the company's latest poll forecast an average 2.1 percent growth, down from 2.3 percent in July's survey. Meanwhile, the percentage of respondents who expect prices to actually rise over the next 12 months was steady at 42 percent, while the percentage of those expecting depreciation climbed to 9 percent.
All in all, 64 percent of Americans surveyed said now is a good time to buy a home, matching the all-time survey low. The share of those who said now is a good time to sell also fell, dropping 5 percentage points to 38 percent.
Duncan explained that the softening in consumer attitudes reflects the combination of declining home affordability and weak income growth nationwide.
"To date, this year's labor market strength has not translated into sufficient income gains to inspire confidence among consumers to purchase a home, even in the current favorable interest rate environment," he said.
Fannie Mae plans to release the results of its third-quarter Mortgage Lender Sentiment Survey later this month, revealing how weakening consumer sentiment toward housing is impacting mortgage demand.
On the economic side, 23 percent of respondents in the August survey said their household income is substantially higher than it was a year ago, down from 28 percent in July. Fifteen percent said their income is significantly lower.
Consumers' outlook is a little brighter, though: 44 percent expect their personal financial situation to improve in the next year, up from 40 percent a month prior. Meanwhile, the share of respondents who said the economy is on the wrong track dropped, though it still remained high at 56 percent.