This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Government Shutdown And Debt Ceiling Debate A Real Downer On Consumer Economic And Housing Sentiment

Stocks in this article: FNMA





WASHINGTON, Nov. 7, 2013 /PRNewswire/ -- The recent U.S. federal government shutdown and the ongoing debt ceiling debate appear to have taken a toll on Americans' outlook toward the economy and housing market, according to the Fannie Mae October 2013 National Housing Survey results. As the survey is conducted generally during the first three weeks of each month, the majority of respondents in October were surveyed during the government shutdown. Notably, the gap between the share of consumers who said the economy is on the wrong track and those who said it's on the right track widened from 16 percentage points in September to 40 percentage points in October – a record month-over-month change since the survey's inception in 2010.

With regard to housing, the share of consumers who say it's a good time to buy a house declined to 65 percent – also an all-time survey low – and the share who say mortgage rates will go up in the next year fell 6 percentage points to 57 percent. However, while Americans' housing sentiment may continue to slow during the next few months as the debt ceiling debate ramps up, it is not expected to derail the gradual healing in the housing market.

"Housing market sentiment has clearly suffered in the wake of the recent government shutdown and debt ceiling debate," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "In October, we saw attitudes toward both the economy and the current buying environment experience their largest one-month drops in the survey's three-year history. While this decline in consumer optimism may portend a slowing of the housing recovery, supply constraint data suggest that we are likely to see continued positive growth in home prices. That being said, October's survey results suggest that consumer attitudes are highly responsive to ongoing debate and decision-making in Washington. Three key budget and debt ceiling dates loom in December, January, and February. The handling of each will likely play a key role in determining the pace and timing of any recovery in consumer sentiment."

SURVEY HIGHLIGHTS

Homeownership and Renting

  • At 2.9 percent, the average 12-month home price change expectation continued to fall, decreasing 0.2 percent from last month.
  • The share of people who say home prices will go up in the next 12 months fell by 6 percentage points to 46 percent, while those who say home prices will go down increased 4 percentage points to 10 percent.
  • The share of respondents who say mortgage rates will go up in the next 12 months fell 6 percentage points from last month to 57 percent.
  • The share who say it is a good time to buy a house had the biggest ever one-month change, and fell to a survey low of 65 percent.
  • The average 12-month rental price change expectation increased 1 percentage point to 4.4 percent, a 12-month survey high.
  • Fifty-two percent of those surveyed say home rental prices will go up in the next 12 months, remaining at the same level from last month.
  • Forty-six percent of respondents think it would be easy for them to get a home mortgage today, remaining steady since January.
  • The share of respondents who said they would buy if they were going to move increased slightly to 70 percent, a new survey high.




1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,810.06 +91.06 0.51%
S&P 500 2,063.50 +10.75 0.52%
NASDAQ 4,712.97 +11.1030 0.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs