June 10, 2014

Fannie: Consumers reticent about economy

June 11, 2014 – A Fannie Mae National Housing Survey found that fewer consumers in May believed their personal financial situation would improve in the next year than did in April, contributing to what the survey called "reticence about the economy."

"Consumers' lukewarm income expectations and reticence about the economy seem to be holding back housing demand," said Fannie Mae Senior Vice President and Chief Economist Doug Duncan. "This year's spring and summer home buying season has gotten off to a slow start, even as mortgage rates have trended lower over the past two months.

"While recent housing activity suggests that the worst of the housing slump may be behind us, this caution among consumers supports our expectation that the rebound in home sales will likely be too modest to pull sales for all of 2014 ahead of last year," he continued.

The percentage of respondents who expected their financial situation to improve within 12 months fell to 42 percent from 44 percent in April. The survey also found that 68 percent of respondents believe it is a good time to buy a house (compared to 71 percent in April), and 43 percent believe it is a good time to sell a house – a new high point in the survey's history, and a significant increase from April's 30 percent.

Duncan will speak at a session on national and global economic trends titled "Private Forces Move to the Fore" at NAFCU's Annual Conference and Solutions Expo in Last Vegas, slated for July 22-26.