Americans Uncertain Housing Market Has Bottomed Out

RISMEDIA, November 29, 2010-Fannie Mae's most recent nationwide housing survey finds that Americans are less certain that the housing market has bottomed, and continue to be wary of buying a home. The Third Quarter 2010 Fannie Mae National Housing Survey polled homeowners and renters between July 2010 and September 2010. Findings were compared to similar surveys conducted in June 2010, January 2010 and December 2003.

Fewer Americans think it is a good time to buy a home (68 percent, down 2 percentage points since June) and more Americans think it is a bad time to buy (29 percent, up 3 percentage points). Similar to the last survey, an overwhelming majority of Americans believe it is a bad time to sell a home (85 percent, up 2 percentage points since June).

"Consumer attitudes toward buying a home are more negative since last quarter," said Doug Duncan, vice president and chief economist, Fannie Mae. "Our survey shows that Americans' declining optimism about housing and their personal finances is reinforcing increasingly realistic attitudes toward owning and renting."

One-quarter of respondents think that home prices will rise during the next 12 months (6 percentage points lower than in June), while 22 percent expect home prices to decline (4 percentage points higher). Americans continue to believe that rental prices will rise more than home prices and continue to believe that rental prices will go up rather than go down by a ratio of almost 4 to 1 (Americans expect rental prices to rise by 2.8 percent over the next year, compared to 3.6 percent in June).

The perception that buying a home is a safe investment continues to decline among Americans. Although 66 percent of Americans think buying a house is a safe investment, this is down 1 percentage point from June 2010, down 4 percentage points from January 2010, and down 17 percentage points from 2003.

For the first time, delinquent borrowers are more likely to say they would rent rather than buy their next home - 50 percent would rent (up 10 percentage points since January) and 45 percent would buy (down 11 percentage points since January). More than half of delinquent borrowers are very stressed about their debt, and, unlike most Americans, are falling into more debt - 29 percent of delinquent borrowers have significantly increased their mortgage debt during the last year, almost three times the percentage of mortgage borrowers who did so.