After a positive start to the summer, the confidence consumers have in housing is teetering, according to the Fannie Mae Home Purchase Sentiment Index® (HPSI) for July. At 86.5, the Index sunk 4.2 percentage points month-over-month, and 0.3 percentage points year-over-year.
Twenty-four percent of homebuyers were optimistic about purchasing—a four-percentage point dip from June—and 41 percent of homeowners were optimistic about selling, down six percentage points, the HPSI shows.
“Home purchase sentiment seems to have reached a plateau, with potential home sellers likely struggling to find a home to buy amid slow supply growth, expectations for rising mortgage rates, and significant home price increases,” says Doug Duncan, chief economist and senior vice president at Fannie Mae. “Survey respondents cite ‘high home prices’ as the top reason why it is both a good time to sell a home and bad time to buy a home. This suggests a contributing factor to the low supply of existing homes for sale is that current owners are reluctant to trade up in a rising price market.
“Additionally, the shares of consumers citing favorable mortgage rates as a reason why it’s a good time to buy or sell a home both dropped to fresh survey lows,” Duncan says.
The HPSI is derived from Fannie Mae’s National Housing Survey® (NHS).
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