Fannie Mae's National Housing Survey Results

America's favorite government ward Fannie Mae released the findings of its National Housing Survey. The survey was conducted during June and July 2010. Some of the results are really surprising, considering how bad the housing market is. For example, 69% of underwater homeowners said buying a home is a safe investment. Overall, Americans think housing prices have bottomed and that now is a good time to purchase a home. They also expect higher prices during the next year (LMAO). Hope springs eternal with America's homeowners. Here are some of the key findings from the report:

Housing and the Economy

Eighty-two percent of respondents consider homeownership important to the economy, up two points from January.

Only 30 percent think that the economy is on the right track (compared to 31 percent in January), but 44 percent expect their personal financial situation to improve in the next year.

Delinquent borrowers (57 percent) remain more optimistic about the future than the general population, but they are less confident than they were in January (63 percent).

Seventy percent of respondents think it is a good time to buy a house, up six points from January. This is also four points higher than the 2003 survey – well before home prices peaked – when 66 percent said it was a good time.

More than one in three (36 percent) think now is a very good time to buy a house.

But 83 percent said they believe that it is a bad time to sell a house.

More than three-quarters (78 percent) think home prices will stay the same or go up over the next year, up five points from January, with an average price increase of 0.9 percent.

This includes 31 percent who think prices will increase and 47 percent who feel prices will remain about the same. This is a notable shift from January 2010, when these numbers were 37 percent and 36 percent, respectively.

Eighty-five percent of Americans think home rental prices will stay the same or go up over the next year – 39 percent expect them to go up and 46 percent expect them to stay the same.

Almost half of renters (46 percent) expect rental prices to increase, and respondents expect rental prices to increase by 3.6 percent, on average.

Desirability of Homeownership

Sixty-seven percent of respondents said they believe buying a home is a safe investment. However, this is down three points from January and 16 percentage points from the 2003 survey – the largest drop by far among all investment types tracked since then.

This compares to 76 percent who think putting money into a bank account (money market or savings account) is safe, up from 74 percent in January.

In contrast, only 15 percent believe buying stocks is a safe investment, down from 17 percent in January.

Eighty-four percent of consumers believe owning makes more sense than renting, down one point from January.

Among renters, 69 percent believe owning makes more sense, down from 75 percent in January.

Sixty-three percent of all survey respondents would likely buy instead of rent if they were to move, down two points from January.

Respondents cite non-financial reasons such as safety (78 percent) and quality of local schools (79 percent) as driving factors in wanting to own a home, ahead of economic considerations.

Seventy-four percent say they prefer a traditional, fixed-rate mortgage with predictable payments over a floating-rate loan.

State of Consumer Household Finances

Nearly six in ten Americans (58 percent) say their monthly household income has remained about the same compared to a year ago, while 46 percent of delinquent borrowers said their income has declined significantly. Just 19 percent of the general population said their income increased significantly.

Thirty-one percent of all respondents said their monthly expenses are significantly higher than they were 12 months ago, 18 points higher than those who said their expenses declined significantly.

Thirty-three percent of the general population are “stressed” about their ability to make payments on their debts. Forty-three percent of renters and 81 percent of delinquent borrowers say they are stressed – while 53 percent of delinquent borrowers say they are “very stressed.”

Twenty-two percent of mortgage borrowers said they have reduced their mortgage debt significantly over the last year. However, 30 percent of delinquent borrowers have significantly increased mortgage debt during the same period, almost three times as high as non-delinquent mortgage borrowers.

Twenty-one percent of the general population has reduced non-mortgage debt significantly over the last year.

Twenty-seven percent of mortgage borrowers have reduced such debt significantly over the last year, while only 19 percent of delinquent borrowers have done so.

However, non-mortgage debt has increased for 26 percent of delinquent borrowers.

Diverging Views on Homeownership Among Borrower Sub-groups

Mortgage borrowers (74 percent) and underwater borrowers (69 percent) are more likely to say owning a home is a safe investment than delinquent borrowers (57 percent) and renters (54 percent). However, this measure has fallen among all sub-groups since January, with delinquent borrowers and renters showing the largest declines, down eight and seven points, respectively.

Mortgage borrowers (83 percent) and underwater borrowers (77 percent) said they are more likely to buy in the future than rent – both groups increased two points from January. The number of renters (37 percent) and delinquent borrowers (52 percent) who said they are more likely to buy in the future declined by seven and four points from January, respectively.


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