In its latest Home Purchase Sentiment Index, Fannie Mae has found that just 14 percent of consumers believe it’s a good time to buy a home—a new survey low. Notably, the November survey was taken just as mortgage rates began their multi-week retreat.
Some 44 percent of respondents thought mortgage rates would continue to climb over the next 12 months, down from 47 percent in October.
“Over the past year, the HPSI has plateaued at a low level, evidence of persistent consumer pessimism regarding the state of the housing market,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “Looking back, consumer belief that it’s a ‘bad time to buy a home’ hit a survey high several times this year—including this month—and each time the pessimism could be attributed to high home prices and high mortgage rates.
“At the end of 2022, as mortgage rates approached 7 percent, a rate level not seen in over a decade, a plurality of consumers said they expected home prices to decrease; however, that optimism faded over the course of 2023,” Duncan continued. “A significant majority of respondents have also continued to expect mortgage rates to increase or stay the same, though these expectations have tempered over the year. At the same time, consumers have expressed a reduced sense of financial security, with fewer respondents reporting household income growth over the year and a higher percentage saying their incomes remained the same.”