RealEstateEconomyWatch.com

For the fifth month in a row, Americans in October expected home prices to decline over the next 12 months in Fannie Mae’s monthly consumer survey.

However, consumers’ expectations have changed significantly since September, from 1.1 percent decline to just 0.3 percent.

Findings show that consumers have experienced stagnant incomes over the past year and do not expect their personal financial situations to improve over the next twelve months.

“The October survey showed that consumers’ outlook for the housing market has remained downbeat, as they expect home prices to decline over the next year, extending the streak of negative outlooks to five consecutive months.” said Doug Duncan, vice president and chief economist of Fannie Mae. “More positive economic headlines over the past month failed to lift consumers’ moods.  While their views regarding their personal finances and the direction of the economy have not deteriorated further, it is discouraging to see the lack of appreciable improvement after overall sentiment took a hit during the debt ceiling debate in August.”

“The fact that sentiment appears to be in a holding pattern at depressed levels is a cause for concern for the development of the housing market and for the economy as a whole, as there will be no meaningful economic recovery without a housing recovery,” Duncan stated.

• An all-time high of 46 percent of consumers expect their personal financial situation to stay the same over the next 12 months.
• An all-time high of 65 percent of consumers say their income is about the same as it was 12 months ago.

• Seventy-seven percent say the economy is off on the wrong track (unchanged since September), while just 16 percent think the economy is on the right track, also unchanged since September and tying the all-time low number.
• Thirty-six percent report significantly higher expenses compared to 12 months ago, (down 7 percentage points since last month).
• •Just 19 percent of respondents expect home prices to increase over the next 12 months (up 1 percentage point since last month), while 23 percent say they expect home prices to decline (down by 2 percentage points since last month). Fifty-five percent say prices will stay the same, tying the all-time high number set last month.
• Thirty-six percent of Americans say that mortgage rates will go up over the next 12 months (up 3 percentage points since last month).
• While 69 percent of respondents say it is a good time to buy a home (up by 1 percentage point since last month), just 10 percent say it is a good time to sell (unchanged since last month).
• On average, Americans expect home rental prices to increase by 3.3 percent over the next 12 months, unchanged since last month.
• Thirty-one percent of Americans say they would rent their next home, while 66 percent say they would buy, (up by 3 percentage points since last month).