Markets across the country seem to be leaning in favor of buyers, but not enough to convince consumers.
Nearly three-quarters of those surveyed by Fannie Mae think it’s a bad time to buy a house, according to the government-sponsored entity’s August Home Purchase Sentiment Index, which measures consumer confidence in the housing market. That’s 44 percentage points higher than those who believe it is a good time to purchase, a delta that has grown 21 percentage points since the same time last year.
Meanwhile, the divide among those who think now is the time to sell — and those who don’t — is smaller. Fifty-eight percent of those surveyed said it is a good time to part with properties at the moment, compared to 41 percent who responded the opposite. The gap between the two shrank from last year by 14 percentage points.
Overall, Fannie Mae’s index ticked down 0.7 points in August compared to the same time the year before, signaling that consumer sentiment toward home buying has weakened. However, it is 3.7 points higher than it was in March, when President Donald Trump’s tariffs went into effect. March’s reading was the index’s lowest so far this year.
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Fannie Mae’s latest survey comes amid persistent economic uncertainty and unyieldingly high interest rates. The recent spring selling season, which usually is a boon for the real estate industry, posted its weakest one in more than a decade.
High home prices haven’t helped, either. In the second quarter, U.S. housing prices climbed 2.9 percent year over year, though they were flat from the quarter before, according to the Federal Housing Finance Agency.
Many of the consumers surveyed by Fannie Mae do not think this trend will reverse any time soon.
Forty percent of respondents believe home prices will increase over the next 12 months. Just 22 percent said otherwise. However, 33 percent of those surveyed were optimistic that mortgage rates will drop over the year, while just over a quarter said they will rise.