Fannie Mae: Consumer Confidence in Housing Flat in June
(Courtesy Fannie Mae)
Fannie Mae released its Home Purchase Sentiment Index for June, notching an only 0.4 point increase to 66 as supply and economic constraints continue to weigh heavily on American homebuying.
The index noted that 78% of consumers still report it’s a “bad time” to buy a home, a fairly consistent sentiment since mid-2021. However, survey respondents reported homebuying conditions improved slightly in June compared with May.
Overall, the index is up 1.2 points year-over-year.
“Confidence in the housing market appears to have plateaued at a relatively low level, suggesting that many consumers may be coming to terms with elevated mortgage rates and high home prices,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “Home prices continue to be supported by the tight supply of homes available for sale, and, compared to the end of last year, fewer respondents today believe home prices will decrease over the next 12 months.”
Duncan also said Fannie Mae continues to forecast home sales to slow in the second half of 2023, due to the affordability constraints and lack of supply.
On the sales side, 64% of respondents say it’s a good time to sell (down from 65% in May), and those who say it’s a bad time to sell increased to 36% from 34%.
Regarding prices, 36% of respondents think home prices will go up in the next year (compared with 39%); 26% think they will go down (a decrease from 28%) and 37% think they will stay the same (up from 33%).
In terms of mortgage rates, the percentage who say they will go down in the next year decreased to 16% from 19%. The percentage who think they will go up decreased to 47% from 50%, and the group who think they will stay the same increased to 36% from 31%.
The Home Purchase Sentiment Index distills information about consumers’ home purchase sentiment from Fannie Mae’s National Housing Survey into a single number. The HPSI is constructed from answers to six NHS questions that solicit consumers’ evaluations of housing market conditions and address topics that are related to their home purchase decisions.