Here’s the best news for builders to use from the latest joint Trulia/RealtyTrac survey: Americans are getting more and more wary about buying a foreclosure. 

According to the results released Tuesday, 81% believe there are downsides to purchasing a distressed property, from the hidden costs to the possibility of home price depreciation. It doesn’t mean buyers aren’t looking at foreclosures—49% are “at least somewhat likely” to consider such a home, an increase of 4 percentage points from May.

But an increasing number (54%) say the “process is risky” when deals involve distressed properties, a worry which is up 5 percentage points from May. The increase is likely due to the controversy surrounding robo-signing of mortgage documents and the impact of those factors on the foreclosure process, from title insurance problems, closing delays, and more. 

About one-third (35%) of Americans think the robo-signing problems will slow the pace of the housing market’s recovery, according to the survey, which was done by Harris Interactive.

Some builders are smartly capitalizing on such buyer worries about foreclosures; CBH Homes in Boise, Idaho, recently rolled out a “Shiny New Awesome” campaign featuring funny, edgy videos that highlight the not-so-savory aspects of buying an existing home vs. new construction.

But builders will also need to brace themselves for encountering an ever-skeptical public. The Trulia/RealtyTrac survey also uncovered some changes in American attitudes toward institutions that touch the housing market; half of the survey’s respondents said they have “less faith” in mortgage lenders, banks, and the government.

Given such attitudes, many respondents also offered fairly pessimistic predictions about when the housing market will recover. One in 5, or 22%, doesn’t think the housing market will return to health until 2015 or later—roughly five years from now.

“I’d love to say we’ve taken a step forward,” said Pete Flint, CEO of Trulia on a conference call discussing the findings. “But the reality is we are stuck in the mud.”

The survey was handled online by Harris Interactive in November 2010 among more than 2,000 adults, including homeowners and renters.

Alison Rice is senior editor, online, at BUILDER magazine.

Learn more about markets featured in this article: Boise City, ID.