The share of consumers who think it’s a less-than-optimal time to buy or sell a home keeps ticking upwards as interest rates rise and housing affordability drops.
Fannie Mae’s monthly Home Purchase Sentiment Index survey showed the share of American consumers who think it’s a good time to sell is still high, at 67 percent, but has dropped 9 percent since May. The share of consumers who think it’s a bad time to sell now sits at 27 percent.
With significant news coverage of record-high home prices across the nation in recent months, many survey respondents said it was a bad time to buy – 76 percent now think so, up from 75 percent one month earlier. The share of consumers who said it was a good time to buy dropped from 20 percent in June to 17 percent in July.
Notably, only 4 in 10 Americans now think home prices will go up in the next 12 months, and 3 in 10 think they will actually decrease. Most people surveyed by Fannie Mae – 67 percent – think mortgage rates will go up, with only 21 percent thinking they’ll stay static and very few anticipating a decline.
“Unfavorable mortgage rates have been increasingly cited by consumers as a top reason behind the growing perception that it’s a bad time to buy, as well as sell, a home,” Fannie Mae Chief Economist Doug Duncan said in a statement. “With home price growth slowing, and projected to slow further, we believe consumer reaction to current housing conditions is likely to be increasingly mixed: Some homeowners may opt to list their homes sooner to take advantage of perceived high prices, while some potential homebuyers may choose to postpone their purchase decision believing that home prices may drop. Overall, this month’s HPSI results appear to confirm our forecast for moderating home sales over the coming year.”