Fannie mae: consumers expect declining home prices, rising rents

If the results of Fannie Mae's monthly national consumer survey accurately portray their attitudes, Americans appear to have increasingly realistic expectations of the housing market. Data from the June survey indicate that Americans are resigned to lower house prices and higher rents and have come to expect rock bottom interest rates.

The Fannie Mae National Housing Survey polls 1,000 home owners and renters each month to assess their attitudes toward owning and renting a home, mortgage rates, homeownership distress, household finances, and overall consumer confidence then compares the results to answers to the same survey conducted monthly since June 2010.

Respondents' expectations regarding home prices have plummeted since the May survey. At that point Americans expected home prices to increase an average of 0.7 percent over the next 12 months. In the June survey the expectation was for a 0.5 percent decline. This is only the second time in the 13 months of the survey that respondents projected a decline in prices. In August the average expected price Change was less than -0.01 percent. The number of Americans who expect prices to rise dropped 6 points to 22 percent while there was a 6 point rise in the numbers who expect it to drop, now 25 percent. Forty-nine percent anticipate no Change; the identical to May.

Source: MortgageNewsDaily.com