Fannie Mae Says Consumers Uncertain Housing Market Has Bottomed

Americans are less certain that the housing market has found its floor, and continue to be wary of buying a home. Those are the findings of ""Fannie Mae's"":http://www.fanniemae.com most recent[IMAGE] nationwide housing survey, which polled homeowners and renters between July and September. Findings were compared to similar surveys conducted in June 2010, January 2010, and December 2003.

The latest survey revealed that one-quarter of respondents think home prices will rise during the next 12 months (6 percentage points lower than in June), while 22 percent expect home prices to decline (4 percentage points higher).

Fannie Mae says fewer Americans think now is a good time to buy a home (68 percent, down 2 percentage points since June), and more Americans think it is a bad time to buy (29 percent, up 3 percentage points). Similar to the last survey, an overwhelming majority of Americans (85 percent) believe it is a bad time to sell a home.

""Consumer attitudes toward buying a home are more negative since last quarter,"" said Doug Duncan, VP and

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chief economist for Fannie Mae. ""Our survey shows that Americans' declining optimism about housing and their personal finances is reinforcing increasingly realistic attitudes toward owning and renting.""

For the first time, delinquent borrowers are more likely to say they would rent rather than buy their next home â€" 50 percent would rent and 45 percent would buy. Fannie Mae says the results indicate that demand for rental properties is likely to increase going forward.

More than half of delinquent borrowers responded that they are ""very stressed"" about their debt. Seven of 10 believe their household income is insufficient for their expenses, and Fannie says more are falling further into debt.

The GSE's survey showed that 29 percent of delinquent borrowers have significantly increased their mortgage debt during the last year. That's almost three times the percentage that did so when looking at the overall pool of mortgage borrowers.

The survey also found that it is becoming more common for people to know someone who has defaulted on their mortgage. Forty-two percent of Americans do. Sixty-three percent of delinquent borrowers and 58 percent of underwater borrowers know a defaulter. Fannie says those who know someone whose defaulted are more likely to consider defaulting themselves.

Fifty-five percent of underwater borrowers, 51 percent of all mortgage borrowers, and 43 percent of delinquent borrowers told Fannie Mae that they think their lender would pursue other assets in addition to their home if they defaulted on their mortgage.