A For Sale sign stands outside a large home in the Pointe Lake Subdivision in Austin, Texas.
Ed Lalo | Bloomberg | Getty Images
Consumer confidence in the housing market fell to its lowest level since 2011 as both buyers and sellers became more pessimistic, according to a monthly survey released by Fannie Mae on Monday.
In July, 17% of those surveyed said now is a good time to buy a home, down from 20% in June. More tellingly, the share of sellers who think it’s a good time to list their home fell to 67 percent in July from 76 percent two months ago.
Fewer consumers now think home prices will rise, while the share of those who think prices will fall has risen from 27 percent to 30 percent.
Fannie Mae’s home buying sentiment index consists of six components: buying conditions, selling conditions, home price outlook, mortgage rate outlook, job loss risk and household income change. Overall, the index dropped two points to 62.8 in July. It’s down 13 points from a year ago. It reached an all-time high of 93.7 before the outbreak in the summer of 2019.
“Unacceptable mortgage rates are increasingly the main reason behind the perception that it’s a bad time to buy and sell,” wrote Doug Duncan, Fannie Mae’s senior vice president and chief economist. Release.
Mortgage News Daily reports that the average rate on a 30-year fixed mortgage started this year at around 3% and has since steadily risen, briefly crossing the 6% line in June. It has fallen back slightly since then but is still in the 5% range.
Just 6 percent of those surveyed said they thought mortgage rates would drop, while 67 percent said they expected rates to rise further.
Sales of both new and existing homes have fallen sharply over the past few months, as affordability weakens and consumers worry about inflation and the broader economy.
Heavy losses in the stock market have dampened demand for high-end homes. More supply is coming on the market, which is helping a bit, but inventory is still below historical norms, especially at the entry level.
“With home price growth expected to slow and further decline, we believe that consumer reaction to the current housing situation will likely increase over time. Some homeowners may choose to list their homes sooner to take advantage of higher valuations, but some home buyers may. “They chose to postpone their purchase decision, believing that prices could drop,” Duncan added.