This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Where 2 Surveys Agree: Mortgages Hikes Don't Scare Buyers

NEW YORK ( TheStreet) -- How much will home prices rise over 12 months? How about 3.9%? No, it's 6.7%.

Those are the findings of two opinion surveys released last week. Granted, they're not perfect apples-to-apples comparisons, so perhaps the best conclusion is that most everyone expects prices to continue to rise, but not as much as in the past year or so.

The surveys also suggest that consumers are shaking off their concern about the mortgage rate hikes of recent months. Now they seem to be focusing on the fact that rates, while likely to rise, are still low, making this a good time to buy.

The 3.9% figure comes from Fannie Mae's quarterly survey of consumers, who were asked to predict price increases from this July to next July. The 6.7% prediction comes from economists and other real estate experts polled by Zillow (Z), the market-information firm, and it covers January through December 2013. So it includes some of the rapid appreciation this year before July, figures that aren't part of the Fannie Mae survey.

Both surveys, one of experts and the other of ordinary folk, find that respondents expect the pace of home price gains to slow as mortgage rates rise. In Fannie's survey, 62% said interest rates will rise over the next year, a five-point increase from the previous survey.

"Consumers have taken the interest rate rise in stride. 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," Doug Duncan, senior vice president and chief economist at Fannie Mae, said in a statement. "These results are consistent with our own analysis of previous housing cycles, which finds that interest rates and home prices are not strongly correlated."

Fannie found that 74% of those polled believe it is a good time to buy a house, while 40% said it was a good time to sell. That difference indicates consumers recognize that in most of the country home prices are still well below past highs.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs