Future outlook is more hopeful, however
The Home Purchase Sentiment Index (HPSI) has plunged for the seventh consecutive month – this time taking 1.2 points off in September to 60.8 and falling to its lowest level since October 2011.
Only 19% of the respondents said it was a good time to buy a home, while 75% said it was a bad time. Meanwhile, the net percentage of respondents who said it is a good time to sell a home is at 26%.
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According to Doug Duncan, senior vice president and chief economist at Fannie Mae, more pessimistic respondents have cited high home prices, unfavorable economic and mortgage rate conditions as the reasons behind bad selling conditions. This also points to a bleak outlook on mortgage, with 64% of respondents expecting rates to continue going up.
“As long as supply is limited and affordability pressures continue to constrain potential homebuyers via elevated home prices and mortgage rates, we expect home sales will remain sluggish,” Duncan said.
Fortunately, the sentiments on job loss and household income are much more positive this time around. More than half of the respondents claimed they aren’t as concerned about losing their job, while another 15% of them said household income had become higher compared to 12 months ago.
As for house prices, the net share of Americans who believe prices will fall in the next 12 months has surpassed those who believe they will go up — a rare finding that has only happened twice before.
"Consumers’ expectation that home prices will decrease matched a survey high, with a higher percentage of consumers believing home prices will decrease rather than increase over the next year – a shift in survey sentiment that had previously only happened in 2011 and at the start of the pandemic in 2020,” Duncan said.
The full report can be found here.