Fannie Mae Offers Different Perspective on ‘Seller’s Market’
Low inventory; escalating home prices; bidding wars–the classic symptoms of a seller’s market, right?
Not so fast, says Fannie Mae, Washington, D.C. The company’s May Home Purchase Sentiment Index fell by 0.5 percent, to 86.2. The report attributed the decrease to declines in three of the six components. The net share of Americans who reported that now is a good time to buy a home reached a record low after falling 8 percentage points, while the net share who reported that now is a good time to sell a home reached a record high, increasing 6 percentage points. The net share of consumers who think home prices will go up fell by 5 percentage points.
Fannie Mae Chief Economist Doug Duncan noted this is only the second time in the survey’s history that the net share of those saying it’s a good time to sell surpassed the net share of those saying it’s a good time to buy. He suggested other factors show this is not so much a “seller’s” market, but rather a market waiting to catch up with itself.
“We continue to see a lack of housing supply as many potential sellers are unwilling or unable to put their homes on the market, perhaps due in part to concerns over finding an affordable replacement home,” Duncan said. “Prospective homebuyers are likely to face continued home price increases as long as housing supply remains tight.”
Index highlights:
–The net share of Americans who say it is a good time to buy a home fell 8 percentage points to 27%, reaching a new survey low.
–The net percentage of those who say it is a good time to sell increased by 6 percentage points to 32%, rising from last month’s decline to a new survey high.
–The net share of Americans who say that home prices will go up decreased by 5 percentage points in May to 40%.
–The net share of those who say mortgage rates will go down over the next twelve months rose 5 percentage points to -52%, following the trend from last month.
–The net share of Americans who say they are not concerned about losing their job fell 6 percentage points to 71%, back near the level seen in March.
–The net share of Americans who say their household income is significantly higher than it was 12 months ago rose 5 percentage points to 18% in May.
