The strength of the economic recovery is a controversial topic that is not likely to subside anytime soon. Some industries, such as housing, have shown signs of improvement in recent years, but many Americans continue to struggle financially amid stagnant wages and an overall sluggish labor market. One thing is certain: There is a lack of confidence across the nation.
More than half of Americans are not convinced with the so-called recovery. According to a new survey from Fannie Mae, 57 percent of Americans believe the economy is heading in the wrong direction, and only 21 percent say their household income is significantly higher than it was at the same time last year. Furthermore, 57 percent of respondents expect their personal financial situation to stay the same or worsen over the next 12 months.
These confidence readings add more doubt to the already fragile housing market. “Consumers’ lukewarm income expectations and reticence about the economy seem to be holding back housing demand,” said Doug Duncan, senior vice president and chief economist at Fannie Mae, in a press release. “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. Our National Housing Survey data show that economic conditions continue to be the top concern among consumers who think it’s a bad time to buy or sell a home.”
When consumers feel pessimistic about the economy and their personal financial situations, purchasing a home is one of the last things they think about. The number of respondents who say now is a good time to buy a house fell to 68 percent in May, down from 76 percent a year earlier. Meanwhile, 43 percent say now is a good time to sell a house, a new all-time high for the Fannie Mae survey.
In addition to believing the economy is heading in the wrong direction, a separate survey reveals that 70 percent of Americans think we are still in the middle of the housing crisis or that the worst is yet to come, according to the MacArthur Foundation. More than half of Americans say buying a home has become less appealing, and 43 percent indicate it’s no longer an “excellent” long-term investment or one of the “best” ways to build wealth. Housing affordability is the main challenge to homeownership.
The report explains: “Respondents overwhelmingly agree that it is challenging for families that live at or below the poverty level to find affordable quality housing, but the concern goes well beyond those living in poverty. The How Housing Matters Survey finds broad recognition among the public that accessing affordable quality housing is difficult for many families within their communities, including families with average income (58 percent very/somewhat challenging), young people just getting started in the labor force (75 percent very/somewhat challenging), and a family with children trying to find housing near quality schools (60 percent very/somewhat challenging).”
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