March saw a decline of 3.8 percentage points in Fannie Mae’s Home Purchase Sentiment Index to 84.5. The share of Americans who felt that now is a good time to buy went down by 10 percentage points to 30%. However, the share of Americans who felt it was now is a good time to sell increased by nine percentage points to 31% – a new high for the second month in a row.
“Home purchase sentiment gave back some of the gains accumulated over the prior two months that sent the index to its survey high in February,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “ Strong home price appreciation has turned into a double-edged sword for the housing market as it boosted the net share of consumers saying it’s a good time to sell to a record high, surpassing the plunging ‘good time to buy’ indicator for the first time in the history of the survey.”
Consumers also felt lower confidence in the stability of their jobs, with a decline of eight percentage points, and respondents who felt that their household income is significantly higher than it was a year ago declined by eight percentage points.
Americans who said mortgage rates will decrease over the next twelve months went down by five percentage points, and those who thought that home prices will increase went down by one percentage point.
“In addition, the net share of consumers who expect mortgage rates to rise over the next year exceeded that experienced during the 2013 taper tantrum,” Duncan said. “However, the housing market could get some tailwinds from a seasonal rise in for-sale inventory, particularly as some sellers seek to lock in profits from recent rapid home price gains. The market could also get a boost from homebuyers who decide to jump into the market before rates rise further.”
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Americans’ optimism about purchasing a home declined in March after a February high, according to a new data from Fannie Mae.