Fannie Mae Housing Survey Shows 64% Pessimistic On US Economy
Last update: 8/15/2011 10:35:18 AM
DOW JONES NEWSWIRES
Fannie Mae's (FNMA) second-quarter national housing survey reveals that 64% of American homeowners and renters say the economy is on the wrong track, the most pessimistic view since the survey's inception in the first quarter of 2010.
"Consumers are more cautious due to concerns over employment and household finances," said Doug Duncan, vice president and chief economist of Fannie Mae. "As a result, consumer spending, which accounts for about 70% of the economy, ground to a halt in the second quarter. Consumers are more hesitant to take on additional financial commitments, and a setback to confidence means a setback to the recovery of the housing market."
For the month of July, the survey found that 70% now believe the economy is on the wrong track, with just 23% saying the economy is heading in the right direction.
Most Americans, 53%, think it would be difficult to get a home mortgage today, and the doubt increases to 71% among renters.
Furthermore, 26% of mortgage borrowers say they are underwater, up from 23% in the first quarter survey.
The results are based on 3,002 telephone interviews of Americans aged 18 and older from April 4 to June 28.
A senior Standard & Poor's analyst said earlier Monday that the U.S. economy isn't likely to slip back into recession although the risks have increased. Investor sentiment was spooked after the agency this month handed the U.S. its first downgrade from triple-A by a major ratings firm.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283; melodie.warner@dowjones.com
(END) Dow Jones Newswires
