Fannie Mae's Monthly Indicators Show Low Consumer Expectations

Fannie Mae's latest monthly national consumer attitudinal survey report found that the average consumer expects home prices to drop by at least 0.5 percent in the next year, down from the anticipated increase of 0.7 percent in May.

According to the report, 69 percent of respondents think it is a good time to buy a home, while only 11 percent say it is a good time to sell a home. Home rental prices, however, are expected to increase an average of 3.9 percent in the next year, according to 44 percent of respondents.

An uncertain job market and high energy and commodity prices leave many consumers hesitant to enter the housing market, as 38 percent of respondents expect their personal financial situation to improve within the year, and 37 percent have reported significantly higher household expenses.

"We see a continued lack of confidence among consumers on home prices, the ability to sell their homes, and the state of their personal finances," said Doug Duncan, vice president and chief economist for Fannie Mae. "All of which point to housing as a continued downside risk to economic growth going forward."

A recent Rasmussen Report found 37 percent of homeowners expect their home's value to decline in the next year, and 36 percent think their home's value is currently worth less than what they owe on their mortgage.  

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