One in 5 homeowners see house price drop: survey

NEW YORK (Reuters) - More than one in five U.S. homeowners expect their home to fall in value in the coming year, a Reuters-University of Michigan consumer survey said on Friday.

The survey found 21 percent of the 1,168 surveyed see a fall in prices, with those heavily concentrated in areas that have already seen values decline, the survey's director Richard Curtin said in a statement.

Even homeowners that expect gains in prices over the next five years are becoming less optimistic, the survey said. The 60 percent that expect higher prices see a mean increase of just 2.9 percent, which is down from 3.9 percent six months ago and fails to keep pace with inflation.

Survey results "indicate a broader and more lasting slump in home prices, and as a result, the data also points toward broader and deeper cuts in spending," Curtin said.

It is a "distinct possibility" economic reports indicate a drop in consumer spending in some quarter in the future, he added.

The survey is the latest evidence that the U.S. housing slump, now in its third year, will linger longer than expected. Economists across Wall Street have been downgrading forecasts on U.S. housing in recent months, expecting that efforts by lawmakers and regulators to stem a rising tide of home foreclosures will have only marginal impact.

(Reporting by Al Yoon, Editing by Chizu Nomiyama)