Rising mortgage rates and home prices have posed challenges for many homebuyers, with 86% saying May was a bad time to buy a home, the highest figure in any Fannie Mae survey since 2010.
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Nearly 9 in 10 Americans said May was a bad time to buy a home, the highest figure recorded since the mortgage lender Fannie Mae began lending in 2010.
Fannie Mae Monthly National Housing Survey The study also found that almost two-thirds of household financial decision makers believe now is a good time to sell.
But rising mortgage rates and home prices are making it harder for many homebuyers to afford to buy a home, and many have given up hope that interest rates and home prices will fall next year, said Doug Duncan, Fannie Mae’s chief economist.
Doug Duncan
“Many respondents were optimistic at the start of the year that mortgage rates would fall, but that never happened and current sentiment reflects pent-up frustration at the overall lack of affordability,” Duncan said. statement“This is most clearly demonstrated by the ‘time to buy’ index hitting its lowest point in the survey’s history this month.”
Source: Fannie Mae National Housing SurveyMay 2024.
Just 14% of those surveyed in May said it was a good time to buy, down from 20% in April and the lowest in the survey since November 2023. While the percentage of people saying it was a bad time to buy in May increased from 79% to a new survey record of 86%, the net percentage of people saying it was a good time to buy in May fell 13 points from April to May to -72%, the lowest in the survey.
“Meanwhile, homeowners’ perceptions of the conditions under which they can sell their homes remain largely positive, dipping only slightly after a steady increase over the past few months,” Duncan said. “This suggests that despite the so-called ‘lock-in effect’ some homeowners may increasingly want or need to sell their homes for a variety of non-financial reasons, which could lead to an increase in properties for sale in the near future.”
Source: Fannie Mae National Housing SurveyMay 2024.
In the May survey, 64% said it was a good time to sell, down from 67% in April, which was the highest level in nearly two years.
The percentage of people saying it’s a bad time to sell increased from 32% to 35%, while the net share of people saying May is a good time to sell fell 6 percentage points from April to 29%.
Source: Fannie Mae National Housing SurveyMay 2024.
The Fannie Mae Homebuying Sentiment Index (HPSI), which combines six questions from the national housing survey into a single number, fell 2.5 points from April to May to 69.4. That’s up 3.8 points from a year ago, but the index often exceeded 90 before the pandemic.
The HPSI plummeted at the start of the pandemic, recovered as lower mortgage rates boosted sales, but began to deteriorate again as mortgage rates began to rise again in 2022. The HPSI hit a record low of 56.7 in October 2022.
Of the six components of the HPSI, three declined in May — buying conditions, selling conditions and unemployment concerns — while two improved — changes in household income and home price outlook. Consumers’ mortgage rate outlook was unchanged from April to May.
Source: Fannie Mae National Housing SurveyMay 2024.
The net share of consumers who say home prices will increase in the next 12 months increased 2 percentage points from April to May, to 25 percent. More than eight in 10 people surveyed expect home prices to either increase (42 percent) or remain steady (40 percent). Only 18 percent say home prices will fall in the next 12 months.
Source: Fannie Mae National Housing SurveyMay 2024.
25% of people surveyed in May expect mortgage rates to fall over the next 12 months, down from 26% in April. The proportion expecting mortgage rates to rise also fell to 31%, with the net proportion believing mortgage rates will fall remaining unchanged at -6%.
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