PrintFebruary 28, 2011
Obama's economy heads further south
Fannie Mae, the now government owned mortgage finance company, has posted a loss of $2.4 Billion for the 4th Quarter of 2010. They have also requested another $2.6 Billion in aid from the Federal Government. Since 2008 Fannie Mae and its sibling company Freddie Mac have taken over $289 Billion in subsidies from the American taxpayer with no end in sight.
Coincidentally Fannie Mae has released new data from a survey they took in January 2011. As compared to a year ago the American people are more pessimistic about the outlook for housing and the economy.
Fewer Americans predicted that home prices would rise over the next 12 months and more people said buying a home was not a safe investment, compared to a similar survey taken in January 2010.
Per the Financial Times:
Doug Duncan, Fannie Mae's chief economist, said that the downbeat sentiment was particularly striking against the backdrop of government policies designed to help home owners, such as loan modification programs and low interest rates.He said: "Even with all these policy solutions that have been thrown at the housing market, people's attitudes have not improved".He added that the survey's findings foreshadowed continued weakness in demand for home purchases.
Some of the results of the survey:
Of 3,401 people polled, 71% said they expected housing prices to stay the same or decline further in 2011 (in the poll taken in January 2010 only 59% thought so).
Only 65% percent of respondents said now would be a good time to buy a house, down from 70% in June 2010.
Perhaps Mr. Duncan and the rest of the bureaucrats in Washington might realize the reason for this pessimism is contained within their own survey. On economic issues beyond housing, 62% said the economy is on the wrong track. Chief among their concerns was a squeeze from stagnant wages and rising expenses. Nearly six in ten said their income had remained flat over the past year, yet 35% said their expenses were significantly higher.
This also mirrors the latest Rasmussen surveys indicating just 26% of Americans believe the country is headed in the right direction.
The public is also acutely aware of the overwhelming debt the country is experiencing and its long term implications as well as the complete lack of any meaningful job creation while daily living costs continue to rise. They also have little faith in those in Washington D.C. (living in their comfortable bubble) who continually propose even more useless and overwhelmingly expensive government programs and are dumfounded when they do not work.
The general public has figured out that these folks do not have a clue on how to fix the nation's problems while being told the economy is on the mend and headed in the right direction. Until confidence begins a major rebound there will be no improvement in the real estate market or the economy as a whole. It is very difficult to believe that will happen with the current people in charge.
