When one thinks "recovery", some of the images envisioned include a healthy labor market (not one saturated by part-time, low wage jobs), rising earnings (not wages that have stagnated for years and in real terms are at Lehman levels) and a vibrant housing market in which new home buyers enter with confidence, and where mortgage loans are abundant and available to qualified creditors. One certainly does not imagine a housing "market" dominated by Chinese, Russian and Arab monely-laundering oligarchs, where half of all transactions are "all cash", and where, as Fannie Mae just reported, the number of Americans who said "now is a good time to buy a home" plunging to 64% - the lowest print in survey history!
But then again, aside from the handful of Americans the bulk of whose net worth is in financial assets, accessible right here and right now (and the balance who are deluded that their equity-invested retirement assets will be worth something in real terms in 20, or even 10 years), nobody really pretends any more there is a recovery.
As for the housing market: stick a fork in it.
From Fannie Mae:
Americans’ attitudes toward the housing market continued to soften in August and suggest that housing activity may resume its modest recovery in 2015 after some pullback this year, according to results from Fannie Mae’s August 2014 National Housing Survey. Despite ongoing improvements in the labor market this year, consumers’ view on their income trend during the past 12 months appears to be more bearish. In addition, the share of consumers who said now is a good time to buy a home dipped for the second consecutive month, falling six percentage points since June to 64 percent – tying the all-time survey low.
"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, senior vice president and chief economist at Fannie Mae. "The deterioration in consumer attitudes about the current home buying environment reflects a shift away from record home purchase affordability without enough momentum in consumer personal financial sentiment to compensate for it. 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. Our third quarter Mortgage Lender Sentiment Survey results, to be released later this month, are expected to show whether mortgage demand from the lender perspective is in line with consumer housing sentiment."
Highlights from the unpleasant (for the permabulls) survey:
Homeownership and Renting
- The average 12-month home price change expectation fell to 2.1 percent.
- he share of respondents who say home prices will go up in the next 12 months held steady at 42 percent. The share who say home prices will go down increased to 9.0 percent.
- The share of respondents who say mortgage rates will go up in the next 12 months fell by four percentage points to 50 percent.
Those who say it is a good time to buy a house fell to 64 percent, matching the all-time low. Those who say it is a good time to sell also decreased—to 38 percent.- The average 12-month rental price change expectation rose to 4.1 percent.
- The percentage of respondents who expect home rental prices to go up in the next 12 months increased to 53 percent.
- The share of respondents who think it would be easy to get a home mortgage today increased by one percentage point.
- The share who say they would buy if they were going to move fell to 64 percent, while the share who would rent increased to 32 percent—the narrowest gap in over a year.
The Economy and Household Finances
- The share of respondents who say the economy is on the wrong track fell by three percentage points from last month to 56 percent.
- The percentage of respondents who expect their personal financial situation to get better over the next 12 months increased to 44 percent.
- The share of respondents who say their household income is significantly higher than it was 12 months ago dropped by five percentage points to 23 percent.
- The share of respondents who say their household expenses are significantly higher than they were 12 months ago remained at 36 percent.
And visually:
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Source: Fannie Mae [9]and Slideshow [10] [10]
