Acquaintance with defaulters may impact Americans' credit decisions and economic outlook

Despite a near epidemic level of home foreclosures in recent years as the result of the subprime lending and housing bubble, consumers still view home buying as smart investment. According to the most recent National Housing Survey from Fannie Mae, roughly 9 in ten homeowners believe owning a home makes more sense than renting - regardless of if they know someone who has defaulted on their mortgage. The survey also found 67 percent of owners and 52 percent of renters who know defaulters say buying a home is a safe investment. "Knowing someone who has defaulted on their mortgage appears to be correlated with consumers being slightly more pessimistic about the direction of the economy, their finances, and their ability to obtain a mortgage, but does not materially correlate with their desire to own a home or their view of housing as a safe investment," said Doug Duncan, vice president and chief economist of Fannie Mae. However, the survey also found Americans are more pessimistic about the broader U.S. economy. Eighty percent of owners and 74 percent of renters who know defaulters say the economy is on the wrong track, slightly higher than among those who do not know defaulters.