Americans see cheaper mortgage rates ahead as expectations flip for the first time ever in Fannie Mae's latest survey

• On balance, more Americans now see mortgage rates falling than rising in the year ahead.
• That's the first time it was happened in the history of Fannie Mae's survey.
• The latest National Housing Survey showed 31% of consumers expect mortgage rates to drop.

More Americans than ever are expecting lower mortgage rates ahead, according to the latest Fannie Mae National Housing Survey.

Rounded data showed that a survey-high 31% of consumers see rates falling in the next 12 months, compared to 31% who expect them to go up. Meanwhile, 36% of respondents see rates remaining steady.

"Notably, homeowners and higher-income groups reported greater rate optimism than renters; in fact, for the first time in our National Housing Survey's history, more homeowners, on net, believe mortgage rates will go down than go up," Mark Palim, Fannie Mae's deputy chief economist, said in the report.

That's a significant shift from the previous month's survey results, where 22% of consumers expected lower rates, against 44% seeing a rise.

The dramatic jump in rate optimism helped home purchase sentiment to also increase, rising 2.9 points in December.

The turnaround came as the 30-year mortgage rate continued to drop from nearly 8% in early November to 6.62% in the past week, Fannie Mae said.

Shifting sentiment could help improve affordability after many homeowners stayed on the sidelines last year, unwilling to give up lower rates that they locked in before the central bank started raising borrowing costs.

"Homeowners have told us repeatedly of late that high mortgage rates are the top reason why it's both a bad time to buy and sell a home, and so a more positive mortgage rate outlook may incent some to list their homes for sale, helping increase the supply of existing homes in the new year," Palim added.

Still, Fannie Mae's purchasing sentiment remains well below its 2019 peak, and 83% of consumers still consider it a bad time to buy.

And despite improved mortgage optimism among homeowners, the share of respondents who said it's a good time to sell dropped from 60% to 57% between November and December.