Fannie Mae Survey Shows Increasing Pessimism

Washington, DC, Sept. 12, 2011 -- Americans are becoming less optimistic about the economy, home prices and their own personal finances, according to Fannie Mae's National Housing Survey for August.

More than 75% said that the economy is on the wrong track, up from 70% in July and the highest%age in over a year.  One year ago the figure was 60%.  Sixteen% think it is on the right track compared to 23% one month earlier and 28% in August 2010.  

"The degree to which consumer attitudes appear to be sensitive to global events is interesting, and seems to be reflected in their view of the economy and their growing overall pessimism," said Doug Duncan, vice president and chief economist of Fannie Mae.

"I believe the public was looking at the U.S. debt, deficit, and the ensuing political struggle with one eye, and looking at Europe and their sovereign debt issues with the other eye, and saying: 'This is not what we want.'"

Twenty% expect an improvement in home prices over the next year, down from 23% in July and 24% one year ago while 27% expect further deterioration compared to 24% in July and 19% in August 2010.  No change is expected by 49%.

On the other hand, 46% said rental prices would rise.

Fannie Mae's survey is conducted with 1,000 Americans, both homeowners and renters, each month.