Consumer Housing Sentiment Drops For First Time Since November

GettyImages 1181707907 resized 1024x576

GettyImages 1181707907 resized 1024x576

Join the movement at Inman Connect Las Vegas, July 30 – Aug. 1! Seize the moment to take charge of the next era in real estate. Through immersive experiences, innovative formats and an unparalleled lineup of speakers, this gathering becomes more than a conference — it becomes a collaborative force shaping the future of our industry. Secure your tickets now!

Fading hopes that mortgage rates will come down in the next 12 months are denting consumer sentiment about housing market conditions for the first time since November, according to results of a March survey released Monday by Fannie Mae.

Fannie Mae’s Home Purchase Sentiment Index takes six questions from the mortgage giant’s more extensive monthly National Housing Survey and distills them into a single number.

The index dropped 0.9 points in March, to 71.9, even though the percentage of consumers who said it was a good time to buy or sell ticked up slightly in March, and most homeowners and renters said they felt confident that home prices aren’t about to crash.

Three other components of the index — job loss concerns and the outlook for household income and mortgage rates — decreased, bringing the overall index down by 1 percent.

“The HPSI remained relatively flat in March, but we’re seeing signs that consumers may be adjusting their expectations for the housing market to better accommodate the higher mortgage rate and home price environment,” Fannie Mae Chief Economist Doug Duncan said, in a statement that put a positive spin on the numbers.

Despite the dip in sentiment, most Americans surveyed in March (68 percent) said they would try to buy a home rather than rent if they were going to move, in line with past surveys.

“We noted in our latest monthly forecast that we expect to see a gradual increase in home listings and sales transactions in the coming year,” Duncan said. “We believe this will be driven not only by those coming off the sidelines due to a rate-related recalibration, but also by households who may need to move for other life reasons.”

Looking back a year, the Home Purchase Sentiment Index (HPSI) is up 10.6 points. But the index has a ways to go before returning to pre-pandemic levels, when it often surged above 90.

Housing affordability continues to weigh on consumer sentiment, with only 21 percent surveyed in March saying it was a good time to buy a home.

That’s up two percentage points from February and seven percentage points from November when only 14 percent of consumers thought it was a good time to buy, an all-time low in survey records dating to 2010.

Tough conditions for buyers are often good news…

Consumer sentiment about the housing market is starting to waver due to fading hopes of lower mortgage rates in the next 12 months. Despite this, most Americans still prefer buying a home over renting. The Home Purchase Sentiment Index dropped slightly in March, with concerns about job loss, household income, and mortgage rates contributing to the decline. However, the majority of consumers remain confident that home prices will remain stable or continue to rise. The housing affordability issue continues to affect sentiment, with a small percentage believing it is a good time to buy a home. On the other hand, many see it as a good time to sell. Overall, the index reflects a cautious optimism with expectations of a gradual improvement in the housing market in the coming year. There are concerns about getting a mortgage, losing jobs, and household income, but the economy is showing signs of improvement. The potential rebound in mortgage rates may impact homebuyer demand, but experts predict a gradual decline in rates in the coming years. The Future of the housing market looks uncertain, but there is hope for a positive shift as the industry adapts to changing conditions.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

scroll to top