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Nearly 80% of Americans Say It’s a ‘Bad Time’ to Buy a Home

CUToday

WASHINGTON—Americans are feeling pretty pessimistic when it comes to purchasing a home.

The Fannie Mae Home Purchase Sentiment Index (HPSI) increased slightly in July, as consumers’ increased confidence regarding their personal financial situations, but that was largely offset by further pessimism toward homebuying conditions, Fannie Mae reported.

Three of the HPSI’s six components increased month over month, including the components measuring job security and home price expectations. However, 82% of consumers reported that it’s a “bad time to buy” a home, a new survey high and up from 78% in June.

The full index is up 4.0 points year over year.

thumbnail_Fannie HPSI

“While consumers are reporting confidence in the components related to their personal financial situations, it’s unlikely we’ll see housing sentiment catch up to other broader economic confidence measures until there is meaningful improvement to home purchase affordability,” said Doug Duncan, Fannie Mae senior vice president and chief economist.

Duncan noted that in July, a significant majority of consumers indicated their jobs are stable and that their incomes are the same or better than they were twelve months ago.

‘All-Time Low’

“However, homebuying sentiment once again matched its all-time low, with only 18% telling us that it's a good time to buy a home,” Duncan said. “Unsurprisingly, consumers continue to attribute the challenging conditions to high home prices and unfavorable mortgage rates. Further, the share of consumers expecting home prices to continue to rise has also been on a steady climb since March, which may only add to perceptions of unaffordability.”

Duncan added that Fannie Mae has not seen much movement in the “good time to sell” component over the last few months, an indication that the current low levels of existing homes for sale will likely continue to persist in the near term, as also reflected in our latest forecast.”
Survey Highlights

According to Fannie Mae, highlights of the survey include:

  • Good/Bad Time to Buy: “The percentage of respondents who say it is a good time to buy a home decreased from 22% to 18%, while the percentage who say it is a bad time to buy increased from 78% to 82%. As a result, the net share of those who say it is a good time to buy decreased 8 percentage points month over month,” Fannie Mae said
  • Good/Bad Time to Sell: “The percentage of respondents who say it is a good time to sell a home remained unchanged at 64%, while the percentage who say it’s a bad time to sell remained unchanged at 36%. As a result, the net share of those who say it is a good time to sell remained unchanged month over month,” Fannie Mae said
  • Home Price Expectations: According to Fannie Mae, “The percentage of respondents who say home prices will go up in the next 12 months increased from 36% to 41%, while the percentage who say home prices will go down decreased from 26% to 24%. The share who think home prices will stay the same decreased from 37% to 34%. As a result, the net share of those who say home prices will go up in the next 12 months increased six percentage points month over month.”
  • Mortgage Rate Expectations: Fannie Mae noted the percentage of respondents who say mortgage rates will go down in the next 12 months remained unchanged at 16%, while the percentage who expect mortgage rates to go up decreased from 47% to 45%. “The share who think mortgage rates will stay the same increased from 36% to 38%. As a result, the net share of those who say mortgage rates will go down over the next 12 months increased three percentage points month over month.”
  • Job Loss Concern: “The percentage of respondents who say they are not concerned about losing their job in the next 12 months increased from 77% to 80%, while the percentage who say they are concerned decreased two percentage points from 22% to 20%,” Fannie Mae said. “As a result, the net share of those who say they are not concerned about losing their job increased six percentage points month over month.”
  • Household Income: “The percentage of respondents who say their household income is significantly higher than it was 12 months ago remained unchanged at 19%, while the percentage who say their household income is significantly lower remained unchanged at 10%,” according to Fannie Mae. “The percentage who say their household income is about the same remained unchanged at 71%. As a result, the net share of those who say their household income is significantly higher than it was 12 months ago remained unchanged month over month.”

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