Largest mortgage financier: The great home recovery reversal

Housing has peaked and 2014 will show a slowdown from the amount of housing activity in 2013, Fannie Mae’s May 2014 National Housing Survey shows.
Respondents to the annual survey say that economic concerns and stagnant household income are dragging down housing. The results show that in the space of just one month, attitudes toward housing can shift dramatically.
The share of 1,000 respondents who still believe the economy is headed in the wrong direction remained at 57% last month, and those who said their household income is significantly higher than it was at the same time last year decreased four percentage points to 21%.
Housing activity in 2014 has been well below typical seasonal trends.
“Consumers’ lukewarm income expectations and reticence about the economy seem to be holding back housing demand,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “This year’s spring and summer home buying season has gotten off to a slow start, even as mortgage rates have trended lower over the past two months.”
He added that while recent housing activity suggests that the worst of the housing slump may be behind America, this caution among consumers means sales this year will likely be too weak to pull sales for all of 2014 ahead of last year.
The survey findings track with real world indicators that support the conclusions by Fannie Mae: The housing market has serious cracks in the foundation – existing home sales have stalled out, pending home sales have plunged, price increases have slowed, and construction is slowing.
It's a 180 degree turn from the last National Housing Survey, which was considerably more positive.
For the April survey, Duncan said, “consumer attitudes about the current home selling environment have improved and now are at the most favorable level we’ve seen in the survey’s four-year history."
Here are some of the key survey findings from the May report.
Homeownership and Renting

• The average 12-month home price change expectation remained unchanged from last month, at 2.9%
• The share of respondents who say home prices will go up in the next 12 months fell to 48% and the share who say home prices will go down increased to 7%
• The share of respondents who say mortgage rates will go up in the next 12 months continued on a downward trend, dropping to 49%
• Those who say it is a good time to buy a house fell slightly to 68% and those who say it is a good time to sell a house increased to 43% a new all-time survey high.
• The average 12-month rental price change expectation decreased slightly to 3.9%
• 51% of those surveyed said home rental prices will go up in the next 12 months, while 3%of respondents said home prices will go down.
• 49% of respondents thought it would be easy for them to get a home mortgage today, rising 4 percentage points from last month.
• The share who say they would buy if they were going to move increased slightly to 66%.

The Economy and Household Finances

• The share of respondents who say the economy is on the right track increased 3 percentage points from last month to 38%
• The percentage of respondents who expect their personal financial situation to get better over the next 12 months fell slightly to 42%
• The share of respondents who say their household income is significantly higher than it was 12 months ago decreased 4 percentage points to 21%
• The share of respondents who say their household expenses are significantly higher than they were 12 months ago decreased 5 percentage points to 34%