Consumers ‘struggle to find positives’ in current housing market

WASHINGTON — Unaffordability, brought on by continued high mortgage rates and home prices, caused the Fannie Mae Home Purchase Sentiment Index to fall to an all-time low in May.

The index dropped by 2.5 points to 69.4 in May, with just 14% of consumers believing it’s a good time to buy a home, down from 20% in April. Attitudes among sellers also dropped in May, with 64% saying it’s a good time to sell vs. 67% in the previous month.

Consumers continue to believe home prices and mortgage rates will continue to go up over the next year. One bright spot is that a growing share of respondents, now 20%, indicated their household income is significantly higher than a year ago.

“Consumer sentiment toward housing declined from its recent plateau, as an increasing share of consumers struggle to find the positives in the housing market,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “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.”

Duncan said the perception of home-selling conditions has shown less of a decline, indicating “some homeowners may increasingly want or need to sell their homes for myriad of non-financial reasons, which may lead to an increase in listings in the near future.”

Fannie Mae’s forecasts show improvement in housing inventory, which is expected to lead to slightly increased sales activity through the end of the year.

The index is based on Fannie Mae’s National Housing Survey, which polls 1,000 consumers on various home-related topics. Answers from six of the questions are distilled into the Home Purchase Sentiment Index.

See also:

  • In a weak housing market, Walker Edison targets affordable prices, customers seeking to update
  • Case goods suppliers point to housing as a potential chief issue for 2024

The post Consumers ‘struggle to find positives’ in current housing market appeared first on Furniture Today.