Lending in the High Tech Age

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The Latest S e c on da r y M a r k e t a na ly t ic s se r v ic i ng or ig i nat ion ANALYTICS Consumer Optimism Retreats as Government Locks Up Americans watching the budget debate unfold lose some of their confidence. C ontinuing the trend observed in August, Americans' enthusiasm for the housing market abated in September as the government's fiscal policy debate came back into the spotlight. While consumers are still 48 | The M Report "generally positive" on average about housing and the economy, attitudes over the last few months suggest optimism has hit a plateau, Fannie Mae said in its September 2013 National Housing Survey. "Our September National Housing Survey results show that the improvements in consumer housing attitudes witnessed in recent months softened ahead of the government shutdown," said Doug Duncan, SVP and chief economist at Fannie Mae. "Americans' awareness of policy uncertainty leading up to the October 1 shutdown and the pending debt ceiling debate appears to have grown as indicated by an apparent cautionary holding pattern in overall consumer housing and personal finance sentiment." While September's survey results show attitudes leading up to the October shutdown, they do not necessarily reveal its full effects, the company noted. Those results should be seen in the surveys for October and the following months. On the topic of home prices, 52 percent of those surveyed expect increases over the next year, down 3 percentage points from August. Those who say prices will go down fell to 6 percent, matching July's survey low. The average 12-month home price change forecast was 3.1 percent, a decline of 0.3 percentage points from the previous survey. Sixty-three percent of Americans said they believe mortgage rates will be up in the next 12 months, a survey high. Respondents were slightly more encouraged about their chances of getting a loan, with 47 percent saying they think it would be easy—a slight increase from August. Overall, 72 percent of consumers said now is a good time to buy a house—up one point— while 38 percent said now is a good time to sell—up two points. Feelings were mixed when it came to broader economic issues. Though more Americans seem to feel the economy is going where it needs to be, many were less optimistic about their personal finances. "Fifty-five percent of Americans continue to believe that the economy is on the wrong track, while 39 percent think the economy is on the wrong track," Duncan said. The share of respondents who said their household income is significantly higher than it was last year fell by 1 percentage point to 22 percent in September, while the share of those whose expenses are higher rose the same amount to 33 percent. Forty-two percent of those surveyed expect their financial situation to improve over the next year, a decrease of 2 percentage points.

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