The survey questions about 3000rnrespondents in rolling panels.  Thesernrespondents are divided among outright owners of their home (751), owners withrnmortgages (1,261), renters (841) and non-rent paying boarders (150).  The basic survey questions revealed arndeclining optimism among respondents.  Askedrnwhether the country was on the wrong or the right track, 75 percent respondedrnwrong track as compared to 64 percent in the Q2 survey while 18 percent said rightrntrack, down 10 percentage points.  Askedrnif they expected their own personal finances to improve over the next year, 36rnpercent said they expected improvement compared to 39 percent last quarter; 20rnpercent said things would get worse, up from 16 percent.  Asked the same question retrospectively, i.e.rnhave your finances improved in the last 12 months, the answers, which havernremained virtually unchanged through the last three quarters, were thatrnfinances were better, 24 percent; worse, 30 percent; unchanged, 46 percent.</p

Seventy-five percent of respondentsrnfeel it will be harder to buy a home in the future, a sentiment that hasrnremained steady for the last seven quarters. rnHowever 62 percent of current homeowners and 56 percent of renters feelrnthat it is currently a good time to buy a house.  Only 12 percent and 18 percent think it is arngood time to sell.  Good idea or not,rnonly 12 percent of all respondents said it was likely or very likely they wouldrnbuy a home in the next 12 months, and 44 percent said they never intended tornmove again.</p

Doug Duncan, vice president and chiefrneconomist of Fannie Mae said of the survey, “At the macro level, we seernthat economic activity picked up in the third quarter, thanks to a sizablernrebound in consumer spending on services. However,rnthe hike appears to have come out of consumers’ savings, asrndisposable income fell during the quarter. rn”The improvement in consumer spending has notrnspilled over into big-ticket items such as housing, as consumers’ concernsrnover their finances and dissatisfaction about the direction of the economyrnremains elevated.”</p

As to the special attitudinalrnquestions, Duncan said, “Knowing someone who has defaulted on theirrnmortgage appears to be correlated with consumers being slightly morernpessimistic about the direction of the economy, their finances, and theirrnability to obtain a mortgage, but does not materially correlate withrntheir desire to own a home or their view of housing as a saferninvestment.” </p

Survey respondents included 878 ownersrnand 313 renters who know defaulters and 1,134 owners and 528 renters who dornnot.  Knowing a defaulter appeared tornmake little difference in the responses in most cases.  For example, 92 percent of owners who knew arndefaulter said owning makes more sense than renting, compared to 89 percent ofrnowners who did not know one.  Attitudesrntoward housing as an investment appear more a function of current homeownerrnstatus than who the respondent knows. rnSixty-seven percent of owners and 52 percent of renters who knowrndefaulters say buying a home is a safe investment, compared to 70 percent andrn52 percent who do not know defaulters. rnSeventy-eight percent of owners and 39 percent of renters who knowrndefaulters say they are likely to buy their next home rather than rent comparedrnto 73 percent of owners and 35 percent of renters who do not know defaulters.</p

Where knowing someone who hadrndefaulted did seem to make a difference was on several measures related to thernbroader economy and personal financial prospects.  There, knowing a defaulter resulted in higherrnlevels of pessimism.  For example, 80rnpercent of owners and 74 percent of renters who know defaulters say the economyrnis on the wrong track, compared to 75 percent of owners and 70 percent of rentersrnwho do not know defaulters.  Nine percentrnof owners and 21 percent of renters who know defaulters are very stressed aboutrntheir ability to make payments on their debts, compared to 4 percent of Ownersrnand 12 percent of Renters who do not know defaulters.  </p

Interviews were conducted by PennrnSchoen Berland, in coordination with Fannie Mae.

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