By Kerry Smith
Buyers’ feelings about the current market hit a low not seen since 2011. Only 17% think it’s a good time to buy a home, and the “good time to sell” index also dropped.
WASHINGTON – Consumers don’t have a good feeling about the current market.
The Fannie Mae Home Purchase Sentiment Index (HPSI) decreased 2.0 points in July to 62.8, its lowest level since 2011 and well below the all-time high set in 2019.
Only 17% of respondents say it’s a good time to buy a home, and the percentage of who believe it’s a good time to sell has also been ticking downward. In July it fell to 67% from a 76% reading in May.
Overall, four of the index’s six components decreased month over month, including the component associated with home price growth expectations, which has fallen meaningfully over the past few months though remains positive. Year over year, the full index is down 13.0 points.
“The HPSI has declined steadily for much of the year, as higher mortgage rates continue to take a toll on housing affordability,” says Doug Duncan, Fannie Mae senior vice president and chief economist. “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.
“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.”
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