With 64% of Americans expressing pessimism over the state of the economy in the second quarter, Fannie Mae's latest quarterly national housing survey shows consumers walking a tight rope into a housing market focused more on renters as employment worries persist. That's the highest percentage of Americans with a negative view of the country's economic shape, according to Fannie Mae, which began the survey in the first quarter of 2010. What's more, negative equity levels continue to rise nationwide as house prices remain suppressed. In the second quarter, 26% of mortgage borrowers were underwater, or owed more than the property is worth, compared to 23% in the first quarter. And when mixed with rising costs of living and fewer jobs, more and more would-be homebuyers say they are unlikely to get a mortgage. Survey results show 73% of single-family renters believe it would be difficult to qualify for a mortgage, with 33% citing their own credit histories as a hurdle. The survey studied consumer confidence across generational lines and found 51% of Gen X (ages 35 to 44) claim it would be hard for them to qualify for a mortgage. When looking at Generation Y (ages 18 to 34) —  the cohort most likely to be first-time homebuyers— the number rises to 59%. Even though pessimism abounds across the market, the younger cohort seems more optimistic about the future. Fifty-seven percent of Generation Y participants said they expect their personal situation to improve over the next year, compared to 42% in Gen X and 35% of baby boomers. The survey, which is based on interviews with more than 3,000 Americans, found 26% worry about losing their job. One-third of respondents perceive their savings to be sufficient, while 44% said household expenses have increased significantly in the past year. "Consumers are more cautious due to concerns over employment and household finances," said Doug Duncan, vice president and chief economist of Fannie Mae. "As a result, consumer spending, which accounts for about 70% of the economy, ground to a halt in the second quarter. Consumers are more hesitant to take on additional financial commitments, and a setback to confidence means a setback to the recovery of the housing market." Write to: Kerri Panchuk.