Americans Consumers Worried About Inflation, Home Values

Twice as many Americans expect the value of their homes to fall in the next 12 months than a year ago, while price rises in the next five years will fail to keep pace with inflation, according to the results of a survey. The Reuters/University of Michigan report, released on Friday, is the latest indicator of grim sentiment among consumers, who have been hit hard by the worst housing slump since the Depression, record energy costs and a shrinking job market. Considering the record declines in home prices in recent months, 28 percent might seem mild, but it is double the 14 percent registered in a survey a year ago, showing how deeply seated the negative sentiment has become. The news gets worse when inflation is factored in. “Long-term home price expectations are now lower than long-term expectations for the overall inflation rate — 2.5 percent versus 3.3 percent — meaning that homeowners expect a decline in the real value of their homes,” the report said.

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