Consumers Say Now is Not a Good Time to Buy a Home

Fannie Mae chief economist predicts slowing housing activity this year.

The Home Purchase Sentiment Index, (HPSI), a monthly survey conducted by Fannie Mae, dipped 2.4 points to 71.8 in January, the lowest level since May 2020.

“In January, a survey record-low 25% of respondents reported that it’s a good time to buy a home, compared to the 69% of consumers who reported that it’s a good time to sell,” noted a Fannie Mae press release. 

According to Doug Duncan, Fannie Mae Senior Vise President and Chief Economist, “Younger consumers—more so than other groups—expect home prices to rise even further, and they also reported a greater sense of macroeconomic pessimism.”

This negative view is unusual for younger generations, Duncan notes.

“While younger respondents are typically the most optimistic about their future finances, this month their sense of optimism around their personal financial situation declined.  All of this points back to the current lack of affordable housing…”

Indeed, only 15% of survey participants aged 18-34 think now is a good time to buy, versus the 83% who think now is a bad time to buy.

Additional survey findings per another Fannie Mae post:

·        Those who feel home prices will rise in the coming year fell from 44% to 43%;

·        Those who feel home prices will drop dipped from 19% to 14%;

·        Those who feel home prices will remain unchanged rose from 30% to 35%;

·        Overall, 69% of respondents think now is a good time to sell, down from 76%; and

·        Fifty-eight percent of survey participants believe mortgage rates will rise in the next 12 months—up from 56%.

“On the whole, the latest HPSI results are consistent with our forecast of slowing housing activity in the coming year,” says Duncan.

Post authored by Lora Bray.

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