Consumer perception of getting a mortgage also falls
Consumer outlook toward housing slumped in April to its lowest level in two years as Americans continue to stress about housing affordability and rising mortgage rates.
Fannie Mae’s Home Purchase Sentiment Index (HPSI) plunged 4.7 points month over month and 10.5 points year over year to 68.5 – its lowest reading since May 2020.
The decline comes as more consumers report “difficult homebuying conditions amid the budget-tightening constraints of inflation, higher mortgage rates, and high home price appreciation,” said Doug Duncan, chief economist of Fannie Mae.
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“The current lack of entry-level supply and the rapid uptick in mortgage rates appear to be adversely impacting potential first-time homebuyers, in particular, evidenced by the larger share of younger respondents (aged 18- to 34) reporting that it’s a bad time to buy a home,” Duncan said. “Additionally, consumer perception regarding the ease of getting a mortgage also decreased across nearly all surveyed segments this month, suggesting to us that the benefit of the recent past’s historically low mortgage rate environment appears to have diminished, and affordability is poised to become an even greater constraint going forward. This sentiment is consistent with our forecast of decelerating home sales through the rest of 2022 and into 2023.”
- The net share of Americans who say it is a good time to buy a home decreased eight percentage points month over month to 19%.
- The net share of those who say it is a good time to sell a home decreased two percentage points to 72%.
- The net share of those who say home prices will go up over the next 12 months decreased nine percentage points to 44%.
- The net share of Americans who say mortgage rates will go down over the next 12 months decreased three percentage points to 5%.
- The net share of Americans who say they are not concerned about losing their job over the next 12 months decreased two percentage points to 84%.
- The net share of those who say their household income is significantly higher than it was 12 months ago decreased four percentage points to 26%.