The Fannie Mae Home Buying Sentiment Index (HPSI) was flat in June, with a modest increase of 0.4 points to 66.0due to the difficult supply and affordability conditions that continue to weigh on the housing market.
“Confidence in the housing market appears to have stalled at a relatively low level, suggesting that many consumers may be accepting high mortgage rates and high home pricessaid Doug Duncan, Senior Vice President and Chief Economist Fannie Mae.
According to the report, “Home prices continue to be supported by the limited supply of homes available for sale and, compared to the end of last year, fewer respondents today believe that home prices will decrease in the next 12 months”.
In addition, consumer mortgage rate expectations have dimmed as a large portion of those surveyed believe that Mortgage rates will stay the same for the next yearwhereas in the middle to late last year, most thought rates would continue to rise, suggesting that consumers are adjusting to the idea that higher mortgage rates are likely to stick around for the foreseeable future.
While most of the six components of the HPSI changed little from month to month, respondents reported that home buying conditions improved slightly in June compared to May. Even so, a large majority of consumers continue to report that it is a “bad time to buy” a home, as they have since mid-2021.
Highlights of the Home Buying Sentiment Index:
The Fannie Mae Home Buying Sentiment Index increased in June 0.4 points to 66.0. The HPSI is up 1.2 points compared to the same period last year.
The percentage of respondents who say that it is a good time to buy a house increased from 19% to 22%, while the percentage saying it is a bad time to buy decreased from 80% to 78%. The net share of those who say now is a good time to buy increased 5 percentage points month over month.
· Respondents who say it is a good time to sell a house decreased from 65% to 64%while the percentage saying it is a bad time to sell increased from 34% to 36%.
The percentage of respondents who say that the house prices will rise in the next 12 months decreased from 39% to 36%, while the percentage saying house prices will fall decreased from 28% to 26%. The share who think home prices will stay the same increased from 33% to 37%.
those who think that mortgage rates will drop in the next 12 months decreased from 19% to 16%, while the percentage that expects mortgage rates to rise decreased from 50% to 47%. The share who think mortgage rates will stay the same increased from 31% to 36%.
Those who say they are not worried about losing your job in the next 12 months remained unchanged at 77%while the percentage saying they are concerned also remained the same at 22%.
The percentage that say that the household income is significantly higher than 12 months ago decreased from 20% to 19%, while those who think that the family income is significantly lower decreased from 12% to 10%. The percentage saying their household income is about the same increased from 67% to 71%.
For more details about the survey, go here.
Keep reading:
· Forecasts for the US housing market in the rest of 2023, according to Realtor.com
· Debts and inflation, among the main barriers for millennials to buy a house
· Mortgage rates in the US rise again and are at their highest point of the year
