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.
The results showed the proportion of respondents who expect their home's value to decline during the year ahead rose to 28 percent.
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 data underscore the self-perpetuating dynamic now tilted toward declines," the report said.
"Continuing declines in home prices have been a substantial factor underlying the slump in confidence and the shift among consumers toward more cautious spending plans," the report said.
The survey data was based on telephone interviews conducted in late April and early May with 392 people.
It showed just 17 percent anticipated that the value of their homes would increase, versus 35 percent recorded a year ago.
Homeowners' expectations for the longer term have also deteriorated.
The proportion of homeowners in May anticipating increases in house prices in the next five years fell to 58 percent from 65 percent a year ago.
The news gets worse when inflation is factored in.
The average annual gains they expect over the next five years slid to 2.5 percent from 3.9 percent a year ago.
This was also below consumers' five-year inflation expectations, which rose this month to 3.3 percent, according to last week's Reuters/University of Michigan consumer confidence report.
That was the highest level of five-year inflation expectations since August 1996.
"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.