Nearly two thirds of American’s believe the economy is on "the wrong track," as concerns over personal finances and the state of the economy heighten, the latest Fannie Mae November Housing Survey revealed.
However, this is still low compared to a year earlier.
Meanwhile, the share of people expecting their personal finances to worsen during the next year has increased during the past few months to 22%.
The survey polled 1,002 Americans to assess their attitude towards owning and renting a home.
“We continue to see caution as the defining feature of Americans’ attitudes toward the economy and their personal financial situation. In this environment, the housing recovery is likely to improve, but only at a gradual pace,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.
Since summer, consumers’ home price expectations have steadily declined, with the share of consumers who say prices are going to increase within the next 12 months falling to 45%. On the other side, the average home price change expectation decreased to 2.5% from 2.9%.
According to the latest residential home sales report from the Census Bureau, the sale of new single-family housing in October 2013 reached an annualized rate of 444,000 units, up 25.4% from September’s rate of 354,000 units.
But as Brian Koss, executive vice president of Mortgage Network, noted in a previous interview with HousingWire, "You will see the market improve as time goes by, but in the short run, we are anticipating a very rough first quarter for mortgage companies due to regular seasonal issues mortgage and high rates."
The Fannie Mae survey revealed the percentage of consumers who expect mortgage rates to climb in the next 12 months has stayed at an elevated level since a hike in June.
The average 30-year, fixed-rate mortgage with a conforming loan limit increased to 4.51%, compared to 3.59% at the beginning of May 2012, the latest Mortgage Bankers Association report recorded.
Furthermore, with the beginning of 2014 looming closer, mortgage originations have to pass new qualified mortgage standards.
"In my state, up to 75% of mortgages won't qualify under QM,” estimates Paul Ryan, the Republican congressman from Wisconsin and former vice presidential candidate. “Community banks, they all think they'll get sued."
"As the economy continues to improve and household balance sheets for most Americans are slow to repair, we continue to see the transition to a full housing recovery as a slow process. Upcoming fiscal policy discussions and labor market developments may also lead to some bumps along the way,” Duncan added.