There was a dip of 0.5% in the Fannie Mae Home Purchase Sentiment Index last month.
But the index, with a June reading of 91.5, is still close to a record high as consumers weigh the advantage of decreasing mortgage rates. The net share of Americans who say mortgage rates will go down over the next 12 months increased 8 percentage points to -29%; up 24 percentage points from the same time last year.
"Growing expectations that mortgage rates will remain steady suggest improved stability for housing affordability and helped keep the HPSI relatively flat this month, despite modest declines in other components," said Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae.
The net share of Americans who say it is a good time to buy a home decreased 4 percentage points to 23% (down 5 percentage points from the same time last year) while the net share of those who say it is a good time to sell a home remained unchanged at 43% (down 4 percentage points year-over-year).
There was a 3 percentage point decline in the share of Americans who think house prices will be lower in 12 months (38%) and optimism in the market was not consistent nationwide.
"Regional variations in housing optimism appear to be tied to a divergence in housing affordability; for example, home purchase sentiment is higher in the Midwest and South than in the West and, to a lesser extent, the Northeast, where the lack of entry-level inventory and the resultant strong price appreciation has had a more profound impact on affordability. With fewer consumers expecting rates to jump back up – thereby creating less urgency to buy now – we expect housing market activity to remain stable," added Duncan.
More market update: