Fannie Mae’s monthly Home Purchase Sentiment Index took quite a hit in January per just released numbers, dropping 2.4 points since December 2021. That marks the lowest level the index has seen since May 2020.
Significantly, the “good time to buy” measure hit an all-time low last month with only 25 percent of respondents answering favorably. On the other hand, 69 percent of respondents indicated that it was a good time to sell.
Doug Duncan, Fannie Mae Chief Economist, comments on the impact that rising home prices and shrinking inventory is having on market sentiment, noting: “Younger consumers—more so than other groups—expect home prices to rise even further, and they also reported a greater sense of macroeconomic pessimism.
“Additionally, while the younger respondents are typically the most optimistic about their future finances, this month their sense of optimism around their personal financial situation declined,” Duncan continued. “All of this points back to the current lack of affordable housing stock, as younger generations appear to be feeling it particularly acutely and, absent an uptick in supply, may have their homeownership aspirations delayed.”