Fannie Mae: COVID-19 Pushes Consumer Confidence in Housing to Lowest Level Since 2011
After falling by nearly 12 points last month, the Fannie Mae Home Purchase Sentiment Index decreased by nearly 18 more points in April to 63.0, its lowest reading since November 2011.
Fannie Mae said five of the six HPSI components decreased month over month, as consumers reported a markedly more pessimistic view of homebuying and home selling conditions. Moreover, on net, more consumers reported that their household income is significantly lower today than it was 12 months ago. Year over year, the HPSI is down 25.3 points.
“The 17.8-point decrease reflected consumers’ deepening concerns about both their incomes and the housing market,” said Doug Duncan, Senior Vice President and Chief Economist. “While consumers did grow more pessimistic in April about whether it’s a good time to buy a home, low mortgage rates remain a driver of purchase optimism. We expect that the much steeper decline in selling sentiment relative to buying sentiment will soften downward pressure on home prices.”
Key findings:
• Good/Bad Time to Buy: The percentage of Americans who say it is a good time to buy a home decreased from 56% to 48%, while the percentage who say it is a bad time to buy increased from 36% to 46%. As a result, the net share of Americans who say it is a good time to buy decreased 18 percentage points.
• Good/Bad Time to Sell: The percentage of Americans who say it is a good time to sell a home decreased from 52% to 29%, while the percentage who say it’s a bad time to sell increased from 36% to 65%. As a result, the net share of those who say it is a good time to sell decreased 52 percentage points.
• Home Price Expectations: The percentage of Americans who say home prices will go up in the next 12 months decreased this month from 39% to 23%, while the percentage who said home prices will go down increased from 22% to 34%. The share who think home prices will stay the same increased from 32% to 36%. As a result, the net share of Americans who say home prices will go up decreased 28 percentage points.
• Mortgage Rate Expectations: The percentage of Americans who say mortgage rates will go down in the next 12 months increased this month from 20% to 23%, while the percentage who expect mortgage rates to go up decreased from 39% to 33%. The share who think mortgage rates will stay the same increased from 33% to 35%. As a result, the net share of Americans who say mortgage rates will go down over the next 12 months increased 9 percentage points.
• Job Concerns: The percentage of Americans who say they are not concerned about losing their job in the next 12 months decreased from 77% to 76%, while the percentage who say they are concerned remained the same at 23%. As a result, the net share of Americans who say they are not concerned about losing their job decreased 1 percentage point.
• Household Income: The percentage of Americans who say their household income is significantly higher than it was 12 months ago decreased from 27% to 20%, while the percentage who say their household income is significantly lower increased from 11% to 21%. The percentage who say their household income is about the same decreased from 61% to 58%. As a result, the net share of those who say their household income is significantly higher than it was 12 months ago decreased 17 percentage points.
