Latest Data From Fannie Mae’s Housing Report

Fannie Mae is The Federal National Mortgage Association (FNMA). Fannie Mae operates in the U.S. secondary mortgage market and works with mortgage bankers, brokers and other primary mortgage market partners to help ensure they have funds to lend to home buyers at affordable rates.

Fannie has been conducting a survey called the “Fannie Mae National Housing Survey” for the following times: first quarter 2011, fourth quarter 2010, January 2010, June 2010 and December 2003.  The survey covers opinions on owning and renting a home, current household finances, view of U.S. finance system and confidence in the economy. The latest surveyed homeowners and renters from January to March 2011.

Study Highlights

  • On average responders expect home prices to increase by .9% compared to .4% increase in Q4 2010
  • Expect rental prices to increase over the year by 3.2% compared to 2.8% in Q4 2010
  • Still think home ownership is a good investment and prefer buying over renting (87%) which was up 3 percentage points over Q4 2010
  • Credit history, income and having enough for a down payment are the main obstacles to getting a home loan.
  • Those underwater in their mortgages (owe more than it is worth) are more stressed about their mortgage than previously. Almost twice as many think it is alright to walk away for a mortgage than one year ago which is 27% now.
  • Most (87%) disapprove of defaulting if underwater or facing financial distress

Owning and renting home

  • 66% think home ownership is a safe investment (up 2 percentage points from Q4 2010)
  • 57% believe buying a home has potential and ranks higher than IRA’s and 401K’s
  • 65% of renters would buy a home in the future
  • 31% of renters will always rent (down 3 percentage points from previous quarter)

Current household finances

  • 59% of responders’ monthly household income was unchanged compared to one year ago; 20% of responders’ income increased significantly
  • 47% of delinquent borrowers said current household income was significantly lower than one year ago
  • 42% expected expenses to improve over next year (up 2 percentage points from Q4 2010); 15% expected them to get worse (down 2 percentage points)

View of U.S. Housing and finance system

  • 67% believe it is good time to pay a house (up 2 percentage points from Q4 2010)
  • 30% expect home prices to increase over next year (up from 4 percentage points from Q4 2010); 48% think they will remain the same; and 17% believe they will decrease

Confidence in the economy

  • 33% of responders believe the U.S. economy is on the right track, which is 4 percentage points above Q4 2010
  • This was the highest number recorded on the studies, with the second highest  in January 2010 with 31% having confidence

Homeowners and renters were slightly more optimistic than Q4 2010 on the economy, home prices and expenses. They still believe in home ownership.  Even though there was some improvement in the study, they are still cautious about mortgages.  This may be due to the uncertain labor market and rising household expenses.

John Ulzheimer is the President of Consumer Education at, the credit blogger for, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.

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