Consumer confidence in the housing market is falling again after a slight uptick in November, with more Americans believing it’s a bad time to buy a home.
Fannie Mae’s Home Purchase Sentiment Index (HPSI) tumbled 2.7 points to 83.5 last month, driven largely by a 12-percentage-point drop in the share of Americans who said it’s a good time to buy a home. That share is down 13 percentage points year over year, hitting a survey low.
The share who said it was a good time to sell rose one percentage point. But the share who reported significantly higher income over the last 12 months sank five percentage points, erasing the previous month’s gains.
“Consumer attitudes regarding whether it’s a good time to buy a home worsened significantly in the last month, as well as from a year ago, to a survey low,” said Doug Duncan, Fannie Mae senior vice president and chief economist. “Although home price growth slowed in 2018, the cumulative impact of sustained, robust increases in home prices outpacing income growth likely helped drive the share of consumers citing high home prices as a primary reason for a bad time to buy a home to a survey high. Meanwhile, consumer’s views on the direction of the economy, a key support for housing-market sentiment of late, has softened somewhat from its October high. Looking ahead, consumers expect the pace of home-price growth to slow over the course of 2019, which may temper growing concern over housing affordability.”
Survey highlights include:
- The net share of those who say home prices will go up fell two percentage points to 31%, declining for the third straight month. The share is down 13 percentage points year over year.
- The share of Americans who think mortgage rates will go down over the next 12 months remained unchanged month over month at 56%.
- The share of Americans who say they are not concerned about losing their job increased two percentage points month over month to 79%. That’s 11 percentage points higher than the same time last year.