Homeownership Aspiration Remains Strong Among Americans

Life Events Greatly Influence Families' Decisions to Rent

WASHINGTON, December 9, 2010 - A new study released today by Fannie Mae (OTC Bulletin Board: FNMA) finds
that most Americans - both those who currently own their homes and those who
rent - strongly aspire to own a home and to maintain homeownership, despite
ongoing turmoil in the housing market. However, demographic trends such as
fewer married couples and less families with children resulting in shrinking
households - combined with financial caution among consumers - are
contributing to an increased willingness to rent.

The Fannie Mae 2010 Own-Rent Analysis is based on extensive primary
research with homeowners and renters (including focus groups and a
quantitative survey), U.S. Census Bureau data, and micro- and macro- economic
parameters, and explores the factors influencing consumers' decisions to buy
or rent a home. Today's release highlights two of the four major themes of
this analysis in reports titled, Persistence of the Homeownership Aspiration
and Housing Choices Throughout the Lifecycle and the Impact of Changing
Demographics. The reports are available on www.fanniemae.com. The
remaining two themes from this analysis will be announced next week.

According to the study findings, 51 percent of current owners and renters
say that the housing crisis has not affected their overall willingness to buy
a home. However, while homeownership aspirations are high for the long-term,
Americans have near-term doubts about buying. Overall, according to Fannie
Mae's National Housing Survey third quarter results, one-third of Americans
(33 percent) would be more likely to rent their next home than buy, up from
30 percent in January 2010. Among renters, 59 percent said they would
continue to rent in their next move, compared to 54 percent in January 2010.

The Fannie Mae National Housing Survey is an ongoing research initiative
that surveys Americans' attitudes about housing on a monthly basis. The most
recent installment of this survey, released in November, showed that
aspirations toward homeownership remain strong - well in excess of current
homeownership rates - but decisions to buy are tempered by current consumers'
cautious attitudes toward home buying in the current financial environment
and a more conservative housing finance environment.

"Despite Americans' strong desire to own their homes, our study reveals
that life events are greatly influencing families' decision to rent. This
trend, coupled with the housing crisis, has caused consumers to approach
homeownership with greater caution and thoughtfulness," said Doug Duncan,
Fannie Mae Vice President and Chief Economist.

Fannie Mae's research analysis indicates that shifting U.S. demographic
and lifestyle trends correlate to consumers' housing decisions, which may
have long-term implications for the housing market. For example, married
couples historically have been more likely to own than other households, but
traditional married couples are a shrinking portion of the population.
Additionally, having children has increased the propensity to own a home,
historically, although many families with children (particularly single
mothers) currently are renting because of financial constraints, and the
percentage of households with children is declining overall.

"The data in the analysis aligns with what we're seeing in the market.
More Americans are viewing rental housing as an attractive and sustainable
housing option. As a result, we remain focused on helping America's working
families - many of whom have incomes at or below the median in their
communities - live in quality, sustainable, affordable rental housing," said
Ken Bacon, Executive Vice President of Fannie Mae's Multifamily Mortgage
Business.

The analysis, based on telephone survey interviews with 2,041 members of
the United States general population (plus 1,566 additional respondents from
geographic areas of interest) and rigorous research by Fannie Mae, compares
current consumer actions, attitudes and financial considerations with
historical consumer behaviors, market experience and economic conditions. The
study identified four key themes of the "owning versus renting"
decision-making process, and results are available in a series of themed
reports that cut the data across consumer life stage;
ethnicity/race/immigration status; and demographic, geographic, housing and
economic status.

Overview of Key Findings

    Desire for Homeownership Remains Strong, Despite Housing Turmoil
    - Fifty-one percent of those surveyed reported the housing crisis had
      little or no impact on their intentions to buy or rent, versus 27
      percent who said they are more likely to buy and 19 percent who said
      they are more likely to rent.
    - The substantial majority of homeowners (89 percent), as well as nearly
      half of renters (44 percent) believe they would be better off owning
      their homes, given their current financial situations.

    Decision to Rent is Driven Primarily by Financial Constraints
    - Lifestyle considerations are more likely to influence consumers'
      decision to buy a home, while the decision to rent is driven primarily
      by financial considerations.
    - More than half (57 percent) of renters believe financial benefits are
      the best reason for renting a home. Based solely on current household
      finances, 52 percent believe they are better off renting, compared to
      24 percent among the population at large.
    - From January 2010 to third quarter 2010, the percentage of renters who
      say they will probably continue to rent in their next move increased
      from 54 percent to 59 percent.
    - Per Fannie Mae calculations, 64 percent of renters who do not plan to
      own and half (50 percent) of those who do plan to own probably do not
      have sufficient income to qualify for the mortgage on a median-priced
      home.

    Americans' Housing Choices Impacted by Lifestyle and Stages of Life
    - Single (unmarried) respondents are least likely to own and report the
      lowest level of satisfaction with their housing choices. After
      controlling for age, income, wealth and a number of other factors,
      regression analysis indicates that married/partnered couples are 2.5
      times more likely to own than other respondents.
    - Respondents with children generally have higher homeownership rates
      than those without children after controlling for age and income, and
      having children is cited as a major reason to buy a home by
      approximately three quarters (76 percent) of the general population.
    - Americans 50 and older are more likely to believe they are better off
      owning than renting than any other age group, and are increasingly
      able to realize homeownership aspirations as they age. A person age
      65-74 is 3.5 times more likely to own than a person under 25.
    - The housing crisis has had the greatest impact on younger Americans.
      Since the housing crisis, homeownership for those 25 to 29 years has
      declined 11 percent since peak rates, compared with a decline of 5
      percent among those 35 to 44 and less for those 45 and older.

    Changing Demographic and Lifestyle Trends May Create Shifts in Housing
    Market Over Time
    - Married couples, statistically most likely to own a home, represent a
      shrinking portion of the population - 50 percent of households in 2009,
      compared with 56 percent in 1990.
    - Although having children increases consumers' propensity to own a home,
      renters are more likely than owners to have children under 18 living
      at home.
    - In particular, 58 percent of single mothers rent, versus 32 percent
      overall for households with children under the age of 18.
    - The percentage of families with children is declining overall, and
      reached an all-time low of 45 percent in 2009.
    - Homeownership rates increase with age, and the U.S. population is
      experiencing an aging trend fueled by the baby boomers. Thirty-eight
      percent of households were headed by someone 55 or older in 2009,
      versus 35 percent in 1990.
    - Possibly reflecting changing demographics and economic caution,
      recently, the size of new homes has begun to decrease, reversing a
      long-standing trend of more space per person. There has been a 6
      percent decline in median square footage of new homes from the peak of
      the housing bubble in 2006 to the second quarter of 2010.

Survey Methodology

Penn Schoen Berland, in partnership with Oliver Wyman, conducted
telephone interviews with 2,041 members of the United States general
population plus 1,566 additional respondents from geographic areas of
interest. To inform the survey design, focus groups were held in Washington,
D.C. and Phoenix, Arizona during July and August 2010. The telephone
interviews were carried out during August and September 2010. In addition to
the focus groups and telephone survey, additional research was conducted to
evaluate the survey findings comparatively with historical market experience.

Fannie Mae exists to expand affordable housing and bring global capital
to local communities in order to serve the U.S. housing market. Fannie Mae
has a federal charter and operates in America's secondary mortgage market to
enhance the liquidity of the mortgage market by providing funds to mortgage
bankers and other lenders so that they may lend to home buyers. Our job is to
help those who house America.

Pete Bakel, Fannie Mae, +1-202-752-2034