WASHINGTON, DC - Americans' pessimism about the economy, home prices, and household finances are deepening, according to findings from Fannie Mae's August National Housing Survey. More than three quarters of Americans (78 percent) say the economy is on the wrong track and only 16 percent think the economy is on the right track (compared to 70 percent wrong track and 23 percent right track in July). Twenty-seven percent of Americans believe home prices will go down and 22 percent of Americans polled expect their financial situation to worsen over the next year - the highest levels of pessimism for both indicators since August 2010.
"The degree to which consumer attitudes appear to be sensitive to global events is interesting, and seems to be reflected in their view of the economy and their growing overall pessimism," said Doug Duncan, vp and chief economist of Fannie Mae. "I believe the public was looking at the U.S. debt, deficit, and the ensuing political struggle with one eye, and looking at Europe and their sovereign debt issues with the other eye, and saying: 'This is not what we want.'"
The survey also finds that:
For the third month in a row, Americans expect home prices to decline over the next year. On average, Americans expect home prices to go down by 0.5 percent (compared to an expected decline of 0.3 percent in July).
While 69 percent of respondents say it is a good time to buy a home (up 3 percentage points since last month), only 9 percent of those polled say it is a good time to sell one's home (down 2 percentage points since July).
Similar to July, 46 percent of Americans believe home rental prices will increase in the next 12 months, while only 6 percent expect a decline in home rental prices (down by 1 percentage point since last month).
The number of Americans who expect their personal financial situation to worsen over the next year increased for the fourth month in a row (up from 20 percent in July to 22 percent in August).
Forty-one percent of Americans report significantly higher expenses compared to one year ago (up by 1 percentage point since July).
The most detailed attitudinal survey of its kind, the Fannie Mae National Housing Survey polled 1,001 Americans via live telephone interview to assess their attitudes toward owning and renting a home, mortgage rates, homeownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts (findings are compared to the same survey conducted monthly beginning July 2010). Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to stabilize the housing market in the near-term, and provide support in the future.
For detailed findings from the August 2011 survey, as well as technical notes on survey methodology and the questions asked of respondents associated with each monthly indicator, visit the Fannie Mae Monthly National Housing Survey site atwww.fanniemae.com/media/survey/monthly.jhtml. Also available on the site are quarterly survey results, which provide a detailed assessment of combined data results from three monthly studies. The August 2011 Fannie Mae National Housing Survey was conducted between August 2-25, 2011. Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae.