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Monday, May 23 2011

Americans expressed cautious optimism about the housing market and the value of home ownership in Fannie Mae’s first quarter 2011 National Housing Survey.

The survey uncovered newfound optimism about home prices, the economy, and personal finances balanced by concerns about rising household expenses, which may require Americans to remain cautions about the recovery.

Despite consumer caution, 57% of Americans still believe that buying a home has a lot of potential as an investment—ranking higher than other investments, such as buying stocks or putting money into an IRA or 401(k) plan.

“Despite moderate signs of improvement in the housing market and the overall economy, consumer attitudes continue to be shaped by ongoing concerns about the recovery and their own financial situations,” said Fannie Mae Chief Economist Doug Duncan. “Uncertainty regarding the improving labor market, expectations of little home price and interest rate movement, and rising household expenses has left consumers feeling less financially secure and translates into weak mortgage demand. While we have seen indications of improving economic activity in recent months, especially the strengthening of private sector employment, consumers’ attitudes improved only marginally, and in some areas not at all, from a year ago, reflecting the continued unevenness and uncertainty of this recovery.”

Other survey highlights:

  • Forty-four percent of home owners believe the value of their home today is worth 20% or more than what they originally paid for it, declining from 46% in June 2010 and 51% in January 2010.
  • One in three Americans (30%) expect home prices to strengthen over the next year, up four percentage points from the fourth quarter of 2010, but virtually unchanged from a year ago.
  • Only 13% of pre-Baby Boomers (age 65+) think it will be easier for the next generation to purchase a home than it was for them, compared with 28% of Generation Y Americans.
  • Nearly one in four (23%) mortgage borrowers say they are underwater, compared with 30% in January 2010.
  • Only 31% of underwater borrowers think they have sufficient savings (compared to 42% in June 2010, and 43% of all mortgage borrowers).
  • Forty-six percent of underwater borrowers say they are stressed about their ability to make payments on their debt (versus 35% in June 2010, and 33% of all mortgage borrowers).

Source: Fannie Mae



Read more: http://www.houselogic.com/news/articles/most-americans-believe-their-home-good-investment/#ixzz1M9Q8ML00
Posted by: Rolando Trentini AT 08:00 am   |  Permalink   |  0 Comments  |  Email
Wednesday, April 21 2010
WASHINGTON, DC — Housing is stabilizing but excess inventory and shadow supply are hindering recovery according to the April 2010 Economic Outlook released today by Fannie Mae's (FNM/NYSE) Economics & Mortgage Market Analysis Group. The outlook projects economic growth of 3.1 percent for all of 2010, notwithstanding the recent dip in growth for the first quarter.
 "Financial conditions are improving as seen by the unwinding of various programs, most notably the MBS purchase program which ended in March. This is strong evidence that the Fed believes the financial sector can stand on its own," said Fannie Mae Chief Economist Doug Duncan. "We estimate that June 2009 was the end of the recession, a good sign that we're moving forward. Nevertheless, significant improvements in the labor market and consumer spending will be the big hurdles as we move toward recovery in the housing market and broader economy."
 New home sales are at record lows and will be slow to recover until inventory of existing homes and the foreclosure overhang are worked off. However, we see key indicators for existing home sales, including pending home sales and purchase applications, are showing good signs of a pickup.
 Jobs, a driving force for housing, are now moving in the right direction. Fundamentals of the labor market appear to be improving as layoffs have slowed and hiring is showing signs of life. March payroll employment increased by 162,000, the largest gain in three years; temp employment posted a sixth consecutive monthly gain; and the average workweek increased. On the downside, unemployment will remain elevated for some time, despite the peak unemployment rate of 10.1 percent likely having occurred in October 2009.
 The Economic Outlook includes the Economic Developments commentary, Economic Forecast, and Housing Forecast — which detail movement of interest rates, the housing market, the mortgage market, and the overall economic climate. To read the full April 2010 Economic Outlook, visit the Economics & Mortgage Market Analysis site at http://www.fanniemae.com.
Posted by: Rolando Trentini AT 02:00 pm   |  Permalink   |  0 Comments  |  Email
Monday, April 19 2010
A new national survey gauging attitudes toward housing finds that two-thirds of Americans (65 percent) still prefer owning a home, despite the challenging economic environment and the housing downturn. The Fannie Mae National Housing Survey, conducted between December 2009 and January 2010, polled homeowners and renters to assess their confidence in homeownership as an investment, the current state of their household finances, views on the U.S. housing finance system and overall confidence in the economy.

"Despite the recent downturn in the housing sector, Americans continue to value homeownership and think about their homes in ways that go much deeper than the financial investment," said Mike Williams, President and CEO, Fannie Mae. "The public also strongly believes in the importance of upholding the financial commitment involved in buying and owning a home, even during these challenging times when home values have fallen."

Survey Shows More Cautious Approach among Consumers

The survey revealed that homeowners and renters alike are taking a more cautious approach to homeownership. Nearly a quarter of renters polled (23 percent) say they will buy a home later than once planned. In addition, Americans with traditional, fixed-rate mortgages with predictable payments are significantly more satisfied than those with other types of mortgages. Respondents cited non-financial reasons such as safety (43 percent) and quality of local schools (33 percent) as driving factors in wanting to own a home, ahead of financial considerations.

"Consumers are still committed to owning a home, but are showing increased cautiousness, regardless of whether they rent, own their homes outright or have a mortgage," said Doug Duncan, Vice President and Chief Economist, Fannie Mae. "They are rebalancing their attitudes toward housing and homeownership by adopting a more realistic, long-term approach, and are less willing to take risks. This focus on sustainable housing is better for the economy, better for the housing market and better for America's families."

A majority of consumers (60 percent) believe that buying a home today is harder than it was for their parents, and nearly seven in ten (68 percent) think it will be even more difficult for their children. Most respondents (88 percent) also believe that walking away from an underwater mortgage is not acceptable, but those who know someone who has defaulted are more than twice as likely to have seriously considered stopping payments on their mortgage.

Key Survey Findings

The following key findings illustrate broad consumer perspectives on a range of related issues, including: current attitudes toward the economy and housing; present conditions for homeownership; owning versus renting; the present climate for borrowing; current mortgage satisfaction; the impact of being "underwater" on borrowers; and attitudes toward defaulting. In some instances, data are compared to a 2003 study on housing by Fannie Mae.

Housing and the Economy

  • Eight in ten respondents consider homeownership important to the economy.

  • Only 31 percent think that the economy is on the right track, but 44 percent expect their personal financial situation to improve in the next year. Delinquent borrowers are even more optimistic about the future, with 63 percent expecting they will be in a stronger financial position in the next year.

  • Nearly two-thirds of respondents (64 percent) think it is a good time to buy a house, and nearly one in three (31 percent) think now is a very good time to buy a house. This is nearly as many who said it was a good time to buy in 2003 (66 percent), well before home prices peaked.

  • Nearly three-quarters (73 percent) think housing prices will go up or stay the same over the next year, including 37 percent who think prices will increase and 36 percent who feel prices will remain about the same.

Desirability of Homeownership

  • Seven out of ten respondents (70 percent) said they believe buying a home continues to be one of the safest investments available. This compares to 74 percent who think putting money into a bank account (money market or savings account) is safe. In contrast, only 17 percent believe buying stocks is a safe investment.

  • Nearly two-thirds (65 percent) of survey respondents prefer owning to renting, citing non-financial reasons such as safety (43 percent) and quality of local schools (33 percent) as driving factors in wanting to own a home, ahead of economic considerations.

  • Americans with 30-year fixed-rate mortgages are significantly more satisfied (93 percent) than those with other types of mortgages (76 percent for those with hybrid ARMs and 68 percent for those with ARMs).

Renters' Views on Renting and Homeownership

  • Nearly eight in ten renters (79 percent) participating in the survey believe that renting has been positive for them and their families.

  • The two most common reasons cited by renters for choosing to rent instead of buy are: the belief that their credit history is not good enough to qualify for a mortgage (54 percent) and that they would be unable to afford the purchase or upkeep of a home (47 percent).

  • Nearly seven in ten renters (67 percent) plan to buy a home at some point in the future.

  • Less than half (44 percent) of those who currently rent said they would buy a house if they were to move, and 23 percent said they would purchase a new home later than they planned.

Challenges Facing Homeowners

  • Most respondents (60 percent) believe it is harder for them to get a mortgage in order to purchase a home than their parents. Nearly seven in ten (68 percent) think it will be harder for the next generation.

  • Survey respondents cited poor credit (22 percent), their income (19 percent), job security (15 percent) and having enough for a down payment (also 15 percent) as the top obstacles to obtaining a home loan.

  • The majority (76 percent) expressed some degree of confidence that they would receive the information they need to choose the right loan if they bought or refinanced a home today, although only 47 percent said they are "very confident."

Attitudes about Delinquency

  • Nearly nine in ten Americans (88 percent), including seven in ten who are delinquent on their own mortgages, do not believe it is acceptable for people to stop making payments on an underwater mortgage, while eight percent believe it is acceptable.

  • However, when asked if financial distress makes stopping payments on an underwater mortgage acceptable, 15 percent of respondents said yes, or nearly double the eight percent who believe it is acceptable generally.

  • Both delinquent mortgage borrowers and those current on their mortgage payments are more than twice as likely to have seriously considered stopping their payments if they know someone who has already defaulted.

Survey Methodology

From December 12, 2009 — January 12, 2010, Penn Schoen Berland, in partnership with Oliver Wyman, conducted 3,451 telephone interviews with Americans age 18 and older.

This included a random sample of 3,051 members of the general population, including 887 homeowners, 1,110 mortgage borrowers, 908 renters, and 338 underwater borrowers (those who report owing at least 5% more on their mortgage than their home is worth). The overall margin of error for the general population sample is +/- 1.77% and larger for subgroups.

An additional oversample of 400 random national delinquent borrowers was also polled. The margin of error for the delinquent oversample is +/- 4.9% and larger for subgroups. Delinquency was defined as not having made a mortgage payment in the past 60 or more days.

For more information about the survey, visit http://www.fanniemae.com/about/housing-survey.html

Posted by: Rolando Trentini AT 08:00 am   |  Permalink   |  0 Comments  |  Email
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The Trentini Team
F.C. Tucker EMGE REALTORS®
7820 Eagle Crest Bvd., Suite 200
Evansville, IN 47715
Office: (812) 479-0801
Cell: (812) 499-9234
Email: Rolando@RolandoTrentini.com


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