Americans Harbor Glum Outlook for Housing and the Economy

Americans continue to harbor a glum outlook for the housing industry and the economy at large.

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According to Fannie Mae's August National Housing Survey, August was the third month in a row that more respondents expect housing prices to decrease than increase in the next 12 months.

Twenty-seven percent expect prices to decline, while 20 percent expect prices to increase. The percent who believe prices will decrease rose 3 percent, and the percent who believe prices will increase fell by the same amount.

The percent of respondents who expect prices to remain the same over the next year stayed almost the same as last month, falling just 1 percent to 49 percent.

Forty-five percent of Americans believe mortgage rates will increase over the next year.

At the same time, 69 percent of respondents said it is a good time to purchase a home, while nine percent said it is a good time to sell a home.

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While Fannie Mae's survey revealed more Americans expect home prices to fall than rise, the survey revealed a reverse trend for rental price expectations.

Forty-six percent of Americans believe rental prices will increase over the next year, while 6 percent expect rent prices to decline.

The percent of Americans who say they have ""significantly higher expenses"" when compared to their expenses one year ago increased by 1 percent from July to August and is now at 41 percent.

The percentage of Americans who anticipate a worsening of their financial situation over the next year has increased for the fourth consecutive month and is now at 22 percent.

The percent of Americans who believe the economy is on the wrong track was 78 percent in August, up from 70 percent in July.

Sixteen percent believe the economy is on the right track, down from 23 percent in July.

""The degree to which consumer attitudes appear to be sensitive to global events is interesting, and seems to be reflected in their view of the economy and their growing overall pessimism,"" said Doug Duncan, vice president and chief economist of Fannie Mae.

""I believe the public was looking at the U.S. debt, deficit, and the ensuing political struggle with one eye, and looking at Europe and their sovereign debt issues with the other eye, and saying: 'This is not what we want,"" Duncan said.

Fannie Mae's National Housing Survey conducted a phone survey of 1,001 individuals-both homeowners and renters-to determine Americans' attitudes toward the housing market and the economy.