Respondents to Fannie Mae's monthly housing survey in December were more upbeat about buying conditions and the possibility for home value appreciation. However, they were also less likely to report a boost in income and more likely to anticipate higher mortgage rates in the coming year.

Changes in mortgage rates are one of six factors Fannie Mae uses in setting its Home Purchase Sentiment Index, which fell 0.5 points from the previous month and 0.6 points from the previous year to 80.7. Other factors influencing this index include opinions on whether it is a good time to buy or sell a home, anticipated changes to home prices, job security, and changes in household income.

Mortgage rates rose noticeably after the presidential election, with Freddie Mac reporting that the average commitment rate for a 30-year fixed rate mortgage climbed from 3.54 percent on Nov. 3 to 4.2 percent on Jan. 5. The Federal Reserve has announced that it expects to make three interest rate hikes in 2017.

"Despite the post-election bump in general consumer attitudes, a rapid rise in mortgage rate expectations has tamped down home purchase sentiment, at least in the near term," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "A spike in economic optimism in the immediate aftermath of an election is typical. Whether consumers will sustain this level of optimism into 2017 remains unclear."

Sixty percent of respondents in Fannie Mae's National Housing Survey for December said they believe mortgage rates will go up in the next 12 months, up from 55 percent in November and 56 percent in December 2015. Five percent said they anticipate lower mortgage rates, up 1 percentage point from both the previous month and previous year.

Even with the higher rates, an increasing share of people thought it would not be difficult to get a mortgage. Fifty-six percent said they thought it would be easy to qualify for a mortgage, an increase of 2 percentage points from November and 5 percentage points from December 2015. Forty-one percent said they thought it would be difficult to get a mortgage, down 3 percentage points from the previous month and 5 percentage points from the previous year.

Eighty-four percent said they weren't concerned about losing their job in the next 12 months, an increase of 3 percentage points from November but down 1 percentage point from December 2015. Sixteen percent said they were concerned about their job security, down 1 percentage point from November but a year-over-year increase of 3 percentage points.

"The spike in interest rates reflects, in part, the market's anticipation of pro-growth policies from the incoming Administration," said Duncan. "If this optimism comes to fruition, it should translate into stronger income growth and increased job security for consumers – the two HPSI components that could help support housing sentiment this year."

Sixty-two percent said they thought it was a good time to buy a home, up 2 percentage points from the previous month but down 1 percentage point from the previous year. Thirty percent thought it was a bad time to buy, unchanged from November but up 2 percentage points from December 2015.

Attitudes on the selling environment remained unchanged, with 51 percent considering it a good time to put a home on the market and 38 percent considering it a bad time. This was slightly more optimistic than the previous year, when 49 percent thought it was a good time to sell and 41 percent thought it was a bad time.

Forty-six percent said they thought home prices will increase in the next 12 months, down from 48 percent in December 2015 but up from 43 percent in November. Eleven percent said they think prices will go down, up 3 percentage points from both the previous month and previous year.

The average expected change in home values was a 2.1 percent increase, down from 2.6 percent in both November and December 2015. The average expected increase in home rental prices over the next 12 months was 3.8 percent, unchanged from the previous year but down from 4.2 percent in November.

Respondents continued to favor buying to renting, with 68 percent saying they would buy their next home if they were to move. This share was up 1 percentage point from the previous month and 5 percentage points from the previous year. Twenty-eight percent said they would rent their next home if they were to move, down from 33 percent in December 2015 but up from 27 percent in November.

Fifty-four percent said they expect home rental prices to increase in the next 12 months, up 2 percentage points from the previous month and 1 percentage point from the previous year. Five percent said they think rents will decrease, up 2 percentage points from both the previous month and previous year.

Respondents were less likely to report improved financial situations, with 22 percent saying their household income has increased significantly in the past year. This share was down from 25 percent in November and 27 percent in December 2015. Twelve percent said their household income was significantly lower, the same as last year and up 2 percentage points from November.

However, respondents were also more likely to expect higher income in the coming year. Forty-eight percent said they expect their personal financial situation to improve, up 1 percentage point from the previous month and 2 percentage points from the previous year. Nine percent believe their financial situation will worsen, down 2 percentage points from November and 1 percentage point from December 2015.

The share of respondents who thought the U.S. economy is on the right track jumped 9 percentage points to 43 percent, up 1 percentage point from the previous year. Forty-five percent said they thought the economy is on the wrong track, down 12 percentage points from the previous month and 4 percentage points from the previous year.

Fannie Mae's National Housing Survey polls a representative sample of 1,000 adults in the United States, asking more than 100 questions via telephone interviews to gauge opinions on the nation's economy and housing market. The survey has been issued each month since June 2010.