Please introduce us to the brave 17% of consumers who think now is a good time to buy a home. Fannie Mae’s Home Purchase Sentiment Index fell two points in July to 62.8, its lowest reading since 2011. Year over year the index is down 13 points.
Overall, just 17% of respondents said it was a good time to buy a home in July, down from 20% a month prior, but 76% said it was a bad time to buy, up from 75% in June.
“The HPSI has declined steadily for much of the year, as higher mortgage rates continue to take a toll on housing affordability,” Doug Duncan, Fannie Mae’s senior vice president and chief economist, said in a statement.
On the seller side, 67% said it was a good time to sell, down from a peak of 76% in May.
“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,” Duncan said. “Additionally, consumers appear to be indicating that selling conditions are softening, as the ‘Good Time to Sell’ component has declined meaningfully over the past two months, and, on net, fewer consumers expect home prices to go up.”
When looking at home price growth, 39% of respondents said that home prices will go up within the next year, compared to 44% a month prior, while 30% believe that prices will go down, up from 27% in June.
“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,” Duncan said.
Consumers were also not optimistic about mortgage rates, with just 6% of respondents saying that mortgage rates will go down in the next year. On the other hand, 67% stated that mortgage rates will go up.
In the past few weeks mortgage rates have fallen, dropping below 5% during the first week of August.
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