Buyer confidence in December worsened, hitting a low point in the Fannie Mae Home Purchase Sentiment Index® (HPSI), a gauge of housing market optimism.
Eleven percent of Americans believe it is “a good time to buy a home,” according to Fannie Mae’s National Housing Survey—down 12 percentage points from November and 13 percentage points from the prior year. The HPSI, which is derived from the National Housing Survey, was also lower, by 2.7 points.
“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,” says Doug Duncan, senior vice president and chief economist at Fannie Mae. “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.”
Thirty-six percent of Americans, however, are optimistic about selling, the HPSI shows—growing 1 percentage point from November and 2 percentage points from the prior year.
“Consumers’ views on the direction of the economy, a key support for housing market sentiment of late, has softened somewhat from its October high,” Duncan says. “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.”
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