Most Think Housing Market Has Bottomed Out: Fannie Mae

By:
Kirk Haverkamp | September 16, 2010

Most Americans believe the housing market has hit bottom and that home values will either hold steady or increase over the next year, according to a new Fannie Mae survey. 

Nearly one-third (31 percent) believe home prices will increase over the coming year, and nearly half (47 percent) believe prices will hold steady, according to the survey, released today. That’s a change from a similar survey done in January, when 37 percent thought prices would rise, but only 36 percent thought they would hold steady over the next 12 months.
 
“Although most Americans believe that home prices have bottomed, they are adopting a much more cautious approach toward buying,” said Doug Duncan, Fannie Mae chief economist. “Homeowners and renters alike continue to be wary of taking on risk, and they are less confident in the long-term outlook for housing.”
 
The Fannie Mae survey paints a markedly different picture from a similar survey of homeowners released this week by Rasmussen reports, which found that only 15 percent of homeowners expect home values to rise over the coming year, with 28 percent expecting a decline. That still leaves a majority who believe the market has at least bottomed out in both surveys, however.
 

Home ownership still seen as a safe investment

 
Despite the downturn in the housing market and ongoing foreclosure crisis, Americans still appear to have strongly positive views about home ownership, according to the Fannie Mae survey. Two-thirds (67 percent) said they believe home ownership is a safe investment, although that’s down three percentage points since January and is 16 percentage points down from a similar survey taken in 2003.
 
Eighty-four percent said they believe owning a house makes better sense than renting, although the share of consumers who said they will likely rent their next home is increasing. Sixty percent of current renters said they would probably rent again if they were to move, up from 54 percent in January.
 
Even so, 70 percent of all respondents said it is a good time to buy a home, although 54 percent think it would be difficult or very difficult to get a home loan right now. There is a perception that credit has eased somewhat; in January, 60 percent said it would be difficult or very difficult to get a mortgage.
 
Oddly enough, delinquent borrowers seemed to be more optimistic about the future than the population at large, with 57 percent saying they expect their financial situation to improve over the next year, compared to 44 percent of the population as a whole. However, that could reflect a belief among delinquent borrowers that their present situation is a crisis that will pass, whereas others are in a more stable financial situation.
 

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