October 5, 2011 (Shirley Allen)
Despite Americans’ pessimistic attitudes about the economy, household finances, and homeownership, 69 percent of the Americans surveyed in Fannie Mae’s Monthly National Housing Survey believed that it is still a good time to buy a home.
It was the fourth time in the last year that 69 percent or more of the respondents felt that way. However, that positive sentiment didn’t carry over when it came to whether or not they thought it was a good time to sell a home. Only nine percent of the Americans surveyed thought it was a good time to sell a home, down from 11 percent from the previous month.
And almost just as many Americans, 62 percent, said they would rather buy a home if they were going to move in the next year, while 34 percent said they would rent.
About half of the respondents, 49 percent, expected home prices to stay about the same over the coming year with 27 percent expecting home prices to decline and only 20 percent expecting home prices to increase. On average, respondents expected home prices to decline only 0.5 percent over the coming year, the third consecutive month in which a decline in home prices was expected.
Most Americans must have thought that mortgage rates had hit bottom in August as only 11 percent thought that interest rates would be going lower over the next twelve months. Forty-five percent of the respondents felt that mortgage rates would be going up while 40 percent expected interest rates to stay about the same. Of course, this was before the Federal Reserve had announced it latest economic assistance plan.
When it came to attitudes about the economy and finances, Americans were significantly more pessimistic with 78 percent saying that the economy is on the wrong track and 16 percent believing the economy was on the right track.
The majority of Americans, 61 percent, reported that their household income was about the same as it was a year ago but that their household expenses were increasing. It was the third consecutive month that American’s reported that their expenses were increasing.
Forty-one percent said that their household expenses were significantly higher than a year ago, that’s up from 37 percent in June. Forty-seven percent reported their expenses were about the same, down from 53 percent in July, while 11 percent said their expenses were significantly lower.
Most Americans believe their financial situation will stay about the same or get better over the next year, but an increasing amount expect things will get worse.
Forty-one percent of the respondents expect their financial situation to be about the same in a year from now, that’s down from 44 percent in May, and 35 percent expect their financial situation to get better, which is down from 41 percent in May. Twenty-two percent of the respondents expect their financial situation to get worse, which is up from 16 percent in April.
Tags: Fannie Mae, economy, financial situation, mortgage rates, interest rates, household finances, pessimism, buy a home, sell a home, expenses