Roughly 68 percent of Americans think its a good time to buy a home, down from 70 percent in June, according to the third quarter 2010 Fannie Mae National Housing Survey.
Meanwhile, 29 percent think its a bad time to buy, up from 26 percent in the previous survey.
And an overwhelming 85 percent think its a bad time to sell a home, up from 83 percent a quarter earlier.
Less Optimism About Home Prices
Just one-quarter of respondents believe home prices will rise in the next 12 months, down from 31 percent in June, while 22 percent expect home prices to fall, up from 18 percent a quarter earlier.
But Americans think rental prices will rise more than home prices, and for the first time since January, delinquent borrowers say they are more likely to rent than buy their next home.
Those who said they would buy have declined by 11 percentage points, while those who say they would rent increased 10 percentage points from January’s levels.
That spells opportunity for those buying investment properties, a trend that could diminish the impact of the shadow inventory overhang.
More Homeowners Aware of Mortgage Problems
Interestingly, 48 percent of Americans (63 percent of delinquent borrowers and 58 percent of underwater borrowers) know someone who has defaulted on their mortgage, up three, seven, and 10 percentage points since June, respectively.
And delinquent borrowers are nearly three times more likely to have considered stopping their mortgage payments completely if they know someone who has defaulted on their mortgage.
But 55 percent of underwater borrowers, 51 percent of all mortgage borrowers, and 43 percent of delinquent borrowers (up 11, 6, and 6 percentage points since January, respectively) think their mortgage lender would pursue other assets beyond their home if they defaulted on their mortgage.