WASHINGTON— Attitudes toward homebuying conditions fell markedly and reached an all-time survey low in Fannie Mae’s newest Home Purchase Sentiment Index (HPSI).
The HPSI decreased 2.5 points in May to 69.4 as the component measuring consumer attitudes toward homebuying conditions fell markedly, Fannie Mae reported.
In the May survey, just 14% of consumers indicated they believe it’s a good time to buy a home, down from 20% in the prior month, while the share believing it’s a good time to sell fell from 67% to 64%, Fannie Mae said.
Meanwhile, consumers continue to believe affordability will remain tight for the foreseeable future, as respondents believe that, on net, home prices and mortgage rates will go up over the next year, according to Fannie Mae.
One Positive
It did note that among the positives from the survey: A growing share of respondents, now 20%, indicated that their household income is significantly higher than it was a year ago. The full index is up 3.8 points year over year, Fannie Mae said.
“Consumer sentiment toward housing declined from its recent plateau, as an increasing share of consumers struggle to find the positives in the current housing market,” Doug Duncan, Fannie Mae senior vice president and chief economist, said in a statement. “While many respondents expressed optimism at the beginning of the year that mortgage rates would decline, that simply hasn’t happened, and current sentiment reflects pent-up frustration with the overall lack of purchase affordability. This is most clearly evidenced by our ‘good time to buy’ component falling to a new survey low this month.
Some May Need to Sell
“On the other hand, homeowners’ perception of home-selling conditions declined only slightly and remains largely positive after a steady increase over the last few months,” continued Duncan. “This suggests to us that, despite the so-called ‘lock-in effect,’ some homeowners may increasingly want or need to sell their homes for a myriad of non-financial reasons, which may lead to an increase in listings in the near future. As our latest forecast notes, we expect improvements to housing inventory will lead to slightly increased sales activity through the end of the year.”
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