Most Americans believe House prices continue to decline next year, according to a recent survey by mortgage finance companies Fannie Mae and consumers are more pessimistic on most financial problems today than a year ago.
The survey September Fannie Mae found that respondents now think House prices will fall on average 1.1% by this time next year. That is a much bigger decline than the 0.5 per cent from August.
"The September survey showed a marked deterioration in consumer expectations, house prices over the next year – their weakest outlook since monthly tracking began in June 2010," said Doug Duncan, vice President and Chief Economist at Fannie Mae in a press release. "Despite a decline in negative economic titles during September … consumers continue to show very negative attitudes. At the same time, the proportion of consumers expecting mortgage rates to climb down sharply at the lowest level that we recorded, possibly influenced by the news that the Federal Reserve will keep interest rates low for years to come. "
In this latest survey, only 33 percent of consumers believe that mortgage rates will rise over the next 12 months, down from 45 percent in the month of August. Feelings may have been influenced by the recent decision of the Federal Reserve to bring long-term rates even lower.
In terms of greater economy, 77 percent of respondents felt that the u.s. economy is on the wrong track. While this is down slightly from 78 percent the previous month, is still an overwhelming negative outlook and that probably will translate into personal spending choices.
As Duncan commented,
"The lack of a sense of urgency to buy homes, given expectations for further declines in home prices and mortgage rates Low, coupled with the General pessimism regarding their personal finances and the economy portends badly for the recovery of the real estate market."
Amber Nelson on October 10, 2011 to interest rate, mortgage news, news
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