Optimism Key Ingredient in Obama, Fannie Housing Reports

A couple of new government reports are showing a glass-half-full view of housing.

By Peter Ricci

Maybe it’s the patriotic Fourth of July fervor, but two new government reports on housing are quite optimistic, with both President Obama’s Housing Scorecard and Fannie Mae’s latest National Housing Survey finding quite a bit to like in today’s gradually recovering housing market, from consumer expectations on housing to the successes of government refinancing initiatives.

On the public policy side, the June 2012 Housing Scorecard from the Obama White House highlighted the administration’s efforts in preventing foreclosures. Some of the data in the scorecard included:

  • As of May, more than one million homeownership have received permanent modifications through the government’s Home Affordable Modification Program (HAMP).
  • Those who received a HAMP modification have saved roughly $536 on their mortgage payments each month, and cumulatively, savings have exceeded $13.3 billion to date.
  • Even better, 86 percent of homeowners who entered the HAMP program the last 23 months have received permanent modifications, and more than 83,000 had their principals reduced, which economist Robert J. Shiller has pinpointed as the ultimate panacea for housing.

Fannie’s housing survey, which polled more than 1,000 Americans on their attitudes towards housing and the greater economy, was even more encouraging, finding that quite a few consumers like the direction housing is headed. Some of the survey’s key findings included:

  • Respondents expect home prices to rise 2.0 percent in the next year, up from 1.4 percent in May’s survey and the highest projected increase since Fannie started the survey in June 2010.
  • In addition, 35 percent of respondents said that prices will increase in the next 12 months, also the highest since the survey’s inception.
  • The number of Americans who think now is a good time to buy a home also hit record levels, with 73 percent sharing that opinion.
  • While homeownership continued to earn supporters, faith in renting continued to subside. Respondents expect rental prices to rise by 4.0 percent in the next year (48 percent anticipate an increase and just 5 percent think rents will go down), and 69 percent said that if they were moving, they would purchase a home – also a record high.

Doug Duncan, the chief economist for Fannie Mae, said a number of factors have influenced consumer’s high opinion on homeownership.

“While consumers remain cautious about the general economy, their attitudes toward the housing market continue to improve,” Duncan said.  “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.”

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