September 16, 2010Fannie Mae's Latest Nationwide Survey Shows Consumers See Mixed Outlook for Housing
Mortgage Borrowers and Underwater Borrowers Are Less Discouraged About Homeownership, While Delinquent Borrowers and Renters Are More Pessimistic
WASHINGTON, D.C. — Fannie Mae's latest national housing survey finds that most Americans believe the housing market has reached bottom, but they are more cautious about owning a home. Respondents to the Fannie Mae National Housing Survey believe that home prices will hold steady (47 percent) or increase (31 percent) over the next year, and that rental prices will stay the same (46 percent) or go up (39 percent). Across the general population, the average expected rise in rental prices is four times that of home prices (3.6 percent versus 0.9 percent).
Seventy percent of Americans think it is a good time to buy a house, compared with 64 percent in a similar survey conducted in January 2010. But 33 percent — up from 30 percent — of all respondents said they would be more likely to rent their next home if they were to move.
“Our survey shows that consumers see a mixed outlook for housing and homeownership,” said Doug Duncan, Vice President and Chief Economist, Fannie Mae. “These findings indicate a return to a more balanced and realistic approach toward housing. While this will likely weigh on the housing recovery in the near-term, it should, over time, help to build a stronger and healthier market focused on sustainable homeownership.”
“Although most Americans believe that home prices have bottomed, they are adopting a much more cautious approach toward buying,” Duncan continued. “Homeowners and renters alike continue to be wary of taking on risk, and they are less confident in the long-term outlook for housing.”
A majority of Americans (67 percent) continue to believe that housing is a safe investment; however, that number is down 16 percentage points from a similar survey conducted in 2003 — the largest drop by far among all investment types tracked since then. Delinquent borrowers and renters are notably more discouraged than mortgage borrowers and underwater borrowers about a home's safety as an investment and the appeal of buying versus renting. More than 70 percent of all respondents believe it will be harder for the next generation to buy a home, up three points from the beginning of the year.
The Fannie Mae National Housing Survey polled homeowners and renters between June 2010 and July 2010. Findings were compared to a similar survey conducted by Fannie Mae from December 2009 to January 2010 and released in April 2010, and a similar survey conducted in 2003.
OVERVIEW OF KEY FINDINGS
Consumers More Confident That Housing Market Has Bottomed, But Less Certain About the Future
The survey revealed that Americans are feeling increasingly more confident that the housing market has hit bottom, but they are less certain about the longer-term prospects for homeownership.
Consumers Continue to Be Cautious in Housing Decisions
The survey showed that consumers are taking on less risk, and are more uncertain about owning versus renting.
Views on Homeownership Diverge Among Sub-groups
The survey also found that mortgage borrowers and underwater mortgage borrowers are less discouraged about homeownership, but delinquent borrowers and renters are growing more pessimistic.
Economic and Housing Attitudes Among Minority Respondents
The survey showed a mix of optimism and concern among African-Americans and Hispanics as to how they think about the economy, their financial situations and abilities to obtain a mortgage.
A fact sheet containing a complete set of the survey's key findings can be found at: Fannie Mae National Housing Survey Fact Sheet.
From June 12, 2010 — July 14, 2010, 3,399 telephone interviews were conducted with Americans aged 18 and older to assess their confidence in homeownership as an investment, the current state of their household finances, views on the U.S. housing finance system and overall confidence in the economy.
This included a random sample of 3,001 members of the general population, including 870 homeowners, 1,020 mortgage borrowers, 900 renters, and 289 underwater borrowers (those who report owing at least 5% more on their mortgage than their home is worth). The overall margin of error for the general population sample is +/- 1.79% and larger for sub-groups.
An additional oversample of 398 random national delinquent borrowers was also polled. The margin of error for the delinquent borrower oversample is +/- 4.91% and larger for sub-groups. Delinquency was defined as not having made a mortgage payment in the past 60 or more days.
Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae.
For more information about the survey, visit http://www.fanniemae.com//portal/research-and-analysis/2010q2-housingsurvey.html .
Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America's secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to home buyers. Our job is to help those who house America.