Fewer consumers thought it was a good time to buy a home in October, but the Fannie Mae Home Purchase Sentiment Index still hovered near its survey high.
"Consumer home-purchase sentiment remains robust, with the HPSI still near its survey high despite dipping for a second consecutive month," said Doug Duncan, senior vice president and chief economist at Fannie Mae.
The index fell 2.7 points last month to 88.8 but was up 3.1 points compared to the previous year.
The share of Americans who said it was a good time to buy shrank seven percentage points to 21%, while those who believed it was a good time to sell dwindled three percentage points to 41%.
The five-month downward trend in consumer sentiment toward home prices continued as the share of Americans anticipating home prices to increase went down two percentage points to 27%.
"The 'good time to buy' component has declined notably, despite low mortgage rates, due in part to the persistent challenge of a lack of affordable housing supply," Duncan said. "In turn, the net share of consumers expecting home prices to increase over the next 12 months has fallen to its lowest reading in seven years."
The percentage of those who reported significantly higher household incomes in October fell five points to 16%.
Respondents were still not sure if mortgage rates would dip anytime soon. The share of those who believed mortgage rates would decline over the next 12 months dropped two percentage points to -25%.
Duncan said that a robust labor market was one of the two factors that offset the declines. More Americans were not concerned about losing their job, up three percentage points to 72%.
"Still, low mortgage rates and a strong labor market are supporting the index's overall strength, which is consistent with our expectation for a modest expansion in home purchase activity in the fourth quarter," Duncan said.