Consumer pessimism reaches new high in August: Fannie Mae
Americans grew more pessimistic about the economy and home prices in August. More than one-quarter of those interviewed by Fannie Mae expect home prices to drop further in the months ahead, the government-sponsored enterprise said in its August National Housing Survey. The GSE interviews about 1,000 Americans via telephone to gauge consumer confidence when it comes to housing and the overall economy. More than three-quarters of respondents, roughly 78%, believe the economy is on the wrong track, up from 70% in July. Meanwhile, only 16% believe the economy is heading in the right direction. About 22% of Americans believe their financial situation will worsen over the next year, making it the highest level of pessimism recorded by Fannie since it started tracking economic indicators in August 2010. "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,'" he said. Fannie researchers found 69% of those surveyed think it's a good time to buy a new home, while just 9% believe it's a good time to sell a home. The survey also showed 46% of the people interviewed believe home rental prices will increase in the next 12 months and 6% forecast a decline. Write to: Kerri Panchuk.