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With home prices and mortgage rates showing little sign of easing, Americans believe May is a better time to sell than buy a home, according to a monthly Fannie Mae survey. found to be strengthening.
Fannie Mae’s National Home Survey last month showed that 65% of Americans now think it’s a good time to sell, up from 51% in December, the highest since July.
Only 19% of respondents said May was the time to buy, down from 23% in April and not far above the all-time low of 16% in October and November last year.
Mark Palim
“High house prices and mortgage rates remain the top concerns for consumers, and while it’s a bad time to buy a home for most of them, it’s a good time to sell,” said Mark Palim, chief deputy economist at Fannie Mae. keeps saying it’s a good time,” said Mark Palim, Fannie Mae’s chief deputy economist. statement. “Consumers also indicated they do not expect these affordability constraints to improve in the near future, with a majority expecting both house prices and mortgage rates to rise or stay flat next year. I think it will be
Fannie Mae’s Home Buying Sentiment Index (HPSI) calculation uses six questions from the National Housing Survey. Is it a good or bad time to buy or sell a home, how home prices and mortgage rates will move over the next 12 months, unemployment fears, household income trends.
Of the six components of HPSI, only two improved between April and May. That is, the expectation that home prices will rise over the next year and whether it is the right time to sell.
The HPSI, which was often above 90 in the months leading up to the pandemic, fell 1.2 points to 65.6 in April-May. This is well above the record low of 56.7 points set in October last year until 2011. However, this is a significant reversal from the 5.5-point rise in the HPSI in March-April, when mortgage rates retreated from their March highs.
Mortgage rates surged again in May due to the debt ceiling crisis and fears that the Federal Reserve has not yet addressed inflation. And while home prices have fallen in some markets, inventory shortages have kept home prices stable or higher in others.
The mismatch between supply and demand for housing may help explain why 80% of those surveyed by Fannie Mae in May said it was a bad time to buy, up from 77% in April. do not have. Only 19% said it was time to buy, and the net share of those who said it was time to buy fell 7 percentage points from April to May.
With house prices holding firm in many markets, just 34% of people surveyed by Fannie Mae in May said they thought it was a bad time to sell, down from 38% in April. Sixty-five percent said it was a good time to sell, and the net share of those who said it was a good time to sell increased by 8 percentage points from April to May.
Only 28% of those surveyed in May expected prices to fall next month, compared with 32% in April. While most people do not expect house prices to rise in the next year, 39% said they would, up from 37% in April. Thirty-three percent said house prices would remain unchanged, and the net share of those expecting house prices to rise increased by 6 percentage points from April to May.
Some economists expect mortgage rates to fall in the coming months as the economy cools, but just 19% of people polled by Fannie Mae last month said the same, compared with April 22. decreased from 10%. The percentage of people who expect mortgage rates to rise in the next 12 months rose from 47% in April to 50% in May. As a result, the net percentage of people who expect mortgage rates to fall over the next 12 months fell by 5 percentage points from April to May.
While some economists still believe the U.S. is headed for recession, a Fannie Mae survey last month found that more than three in four Americans (77%) believe that the next 12 months said he wasn’t worried about losing his job. The percentage of people who said they were worried about losing their job increased from 21% in April to 22% in May, but the net percentage of people who said they weren’t worried about losing their job decreased by 3 points.
Rising wages are one aspect of inflation that the Fed has focused on, but a Fannie Mae poll last month found that most Americans (67%) say their household income is about the same as it was 12 months ago. answered. One in five (20%) of those surveyed said their income had increased significantly, down from 24% in April. Twelve percent of respondents reported significantly lower household incomes, while the net share of significantly higher incomes decreased by 5 percentage points from April to May.
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