(By Balachander) Fannie Mae's housing survey showed that consumers expect home prices to increase in the next 12 months, though fiscal cliff debate appears to rattle overall economic and financial confidence.
Consumer confidence in the housing sector grew last month, marked by continued positive attitudes toward home price, rental price, and mortgage rate expectations, Fannie Mae said.
At 43 percent, the share who believe home prices will go up in the next 12 months reached the highest level recorded, up 6 percentage points over November. The average 12-month home price change expectation jumped to 2.6 percent, Fannie Mae said.
Doug Duncan, chief economist of Fannie Mae said the positive home price outlook could incentivize those waiting on the sidelines of the housing market to buy a home sooner rather than later and thus support continued housing acceleration.
[Related -Savings Glut and Financial Imbalances]
Fannie Mae said 49 percent of those surveyed say home rental prices will go up in the next 12 months, a slight increase from last month.
"However, while consumers seem confident that housing activity is on the rise, their outlook toward the economy and personal finances appears to have resumed a more unsettled trend following a show of optimism in November," Duncan said.
This uncertainty, Duncan said, seems to be prompting a growing share of consumers to expect their personal finances to worsen and may contribute to weaker near-term economic growth.