Few Americans see quick housing market rebound

By Emily Kaiser

WASHINGTON (Reuters) - Two out of three Americans expect home prices to stay the same or drop in the next year, according to a Reuters/Zogby poll released on Wednesday that suggests the battered housing market has further to fall.

However, the economic mood was somewhat more upbeat than it had been a month earlier, possibly reflecting recent record highs on Wall Street and the Federal Reserve's decision on September 18 to lower its benchmark interest rate.

Thirty-one percent of those polled in the monthly survey expect a U.S. recession in the next year, a tad less pessimistic than the prior month's reading of 33 percent.

The survey of 991 likely voters was conducted October 10-14, just as the Dow Jones industrial average and Standard & Poor's 500 were hitting new highs. The previous month's poll was taken shortly before U.S. interest rates were lowered.

Pollster John Zogby said the results show that Americans were a bit less fearful of an imminent economic crisis than they were last month, perhaps because there had been no fresh disasters to harden recession fears.

"There's still mid- to long-term concern, but on the other hand, the Fed's (interest rate) action at least suggests that the immediate crisis -- going to hell in a handbasket quickly -- may have abated," Zogby said. "It's not disastrous, but a significant number of people are downbeat."

Of those polled, 30 percent said they expect home prices in their area to stay about the same in the next year, while 31 percent thought they would drop a little. Slightly more than 7 percent thought home prices would drop a lot.

When the same question was asked a month ago, a similar percentage thought prices would stay about the same, while 35.5 percent predicted they would fall a little and 8.5 percent expected a large drop.