Consumers not deterred by rising mortgage interest rates, survey finds

Consumer attitudes towards the housing market are increasingly positive despite the recent rise in mortgage interest rates, a new survey shows.

Fannie Mae’s July National Housing Survey of 1,000 American adults shows that 62 percent believe interest rates will go up over the next year, an increase of five percentage points compared to June’s survey.

In addition, 53 percent of Americans expect home prices to increase by an average of 3.9 percent over the next 12 months. Only six percent expect prices to fall, a new low in the survey’s three-year history.

Seventy-four percent of those surveyed say now is a good time to purchase a house, and 40 percent say now is a good time to sell. But consumers are bracing themselves for higher mortgage rates: 62 percent of survey respondents say they expect rates to rise over the next year, while only five percent expect them to fall.

Americans are slightly less upbeat about homeownership. Only 45 percent feel it would be easy for them to obtain a home mortgage, down two percentage points, and there was a slight decrease to 64 percent of those who indicated they would buy if they were going to move.

Three percent fewer people expect their personal financial situation to improve over the next year but the percentage of those reporting significantly higher household expenses fell from 36 percent to 30 percent.

“Consumers have taken the interest rate rise in stride,” said Doug Duncan, senior vice president and chief economist at Fannie Mae, in a press release. “Expectations for continued improvement in housing persist, and sentiment toward the current buying and selling environment is back on track from its dip last month. These results are consistent with our own analysis of previous housing cycles, which finds that interest rates and home prices are not strongly correlated.”