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Economic Concerns Weigh on May Housing Confidence

Consumers' attitudes about housing diminished somewhat last month as economic worries weighed on their minds, according to new survey results.

In its latest monthly National Housing Survey, Fannie Mae found 57 percent of Americans still believe the economy is on the wrong track, flat from April's survey. Meanwhile, 38 percent said the economy is on the right path, up from 35 percent in the last survey but still down from last year's highs.

Despite that gain in confidence, fewer respondents in the May survey expect their own financial situation to improve over the next year as household incomes show little improvement.

Further, economic conditions remain a top concern among consumers who believe now is a bad time to buy or sell a home, said Doug Duncan, chief economist at Fannie Mae.

"While recent housing activity suggests that the worst of the housing slump may be behind us, this caution among consumers supports our expectation that the rebound in home sales will likely be too modest to pull sales for all of 2014 ahead of last year," Duncan said.

Survey responses on housing suggest consumers might be taking greater notice of current market trends. As home price increases slow to a more moderate pace, the share of respondents who said prices will continue to rise over the next year fell to less than half, while the share expecting declines rose slightly to 7 percent.

Overall, the average 12-month price change expectation was 2.9 percent, flat from April.

Meanwhile, the number of respondents expecting mortgage rates to make any meaningful change—up or down—over the next year fell, while the share of Americans who believe it would be easy to get a mortgage today climbed up to 49 percent. The latter measure has alternated up and down each month since the start of the year.

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