Fannie Mae Releases July Consumer Indicators

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Fannie Mae

08 Aug, 2011, 15:21 GMT

WASHINGTON, August 8, 2011 /PRNewswire/ --

- Provides Timely Insights into Key Consumer Attitudes Driving Housing Decisions

- Pessimism Pervades Consumer Sentiment About the Economy, Household Finances, and Housing Choices

Fannie Mae's July national consumer attitudinal survey finds that Americans' attitudes about the economy, household finances, and homeownership are growing more pessimistic - with 70 percent of Americans believing that the economy is moving in the wrong direction, while only 23 percent think the economy is moving in the right direction. Key indicators show that more consumers across the country have diminished expectations for home prices and their personal finances, more are thinking about renting as a next step, and twice as many are reporting significantly higher expenses than incomes.

"The impact of recent financial market volatility on household wealth has been a setback to consumer confidence, which we're seeing in our survey results and in Americans' continued restraint in their willingness to take on additional financial commitments," said Doug Duncan, vice president and chief economist of Fannie Mae. "Our overall July survey data, beyond the eleven indicators we present this month, show that most Americans think the economy is on the wrong track - the highest level of pessimism to date for this topic. The sluggish pace of job growth, coupled with this economic uncertainty, is clearly having an impact on consumers' attitudes toward the housing market and their own personal financial situations."

SURVEY HIGHLIGHTS

Homeownership and Renting

  • On average and consistent with June, Americans believe home prices will decline slightly over the next year.  
  • Only 11 percent of respondents say it is a good time to sell one's home (similar to May and June 2011 survey results).
  • Despite Americans' expectations that rental prices will go up in the next 12 months, fewer Americans say they would buy their next home (down 5 percentage points) and more of those surveyed say they would rent (up by 3 percentage points).

Household Finances

  • For the third month in a row, optimism about personal finances has declined, with 35 percent of respondents expecting their finances to get better over the next year (down from 40 percent in April).
  • Consistent with June, 20 percent of respondents report significantly higher household incomes over the past 12 months, while 17 percent report significantly lower incomes.
  • As compared to past months, four times as many Americans report significantly higher household expenses (up from 37 percent in June to 40 percent in July) as significantly lower expenses (10 percent).

The most detailed attitudinal survey of its kind, the Fannie Mae National Housing Survey polls 1,000 Americans each month via live telephone interview to assess their attitudes toward owning and renting a home, mortgage rates, homeownership distress, 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 June 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 July 2011 survey, as well as technical notes on survey methodology and the questions asked of respondents associated with each monthly indicator, please visit the Fannie Mae Monthly National Housing Survey site at http://www.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 July 2011 Fannie Mae National Housing Survey was conducted between July 5, 2011 and July 26, 2011. Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae.

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.

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