The net share of Americans who think it’s a good time to buy a home is the lowest ever surveyed by Fannie Mae — and a few sellers are starting to have their doubts, too.

That’s according to a monthly telephone survey of about 1,000 homeowners and renters that Fannie Mae has been conducting since 2010, which also found most Americans don’t think home prices will be higher 12 months from now, but that mortgage rates will go up.

Only 28 percent of consumers polled by Fannie Mae in July thought it was a good time to buy a home, down from 32 percent in June. With 66 percent of those surveyed saying it was a bad time to buy, the “net share” for those who say it’s a good time to buy fell by 6 percentage points, to a new survey low of minus 38 percent.

Source: Fannie Mae National Housing Survey.

The last time most people thought it was a good time to buy was in March, when the spring homebuying season was just kicking off. At that time, 53 percent of Americans thought it was a good time to buy, and only 40 percent thought it was a bad time.

Buyer sentiment has been slipping ever since then, with listings remaining scarce in many markets and prices soaring. The lack of affordable homes is having an impact on two groups that have traditionally been mainstays of the housing market — Americans aged 35-44, and middle-to-higher income buyers, said Fannie Mae Chief Economist Doug Duncan.

Doug Duncan | Photo credit: Fannie Mae

“Historically prime homebuying groups appear to be increasingly sensitive to the lack of affordability, as home prices continue to increase and homes for sale remain in short supply,” Duncan said in a statement. “While all surveyed consumer segments have reported increased pessimism toward homebuying conditions over the past several months, two of the segments perhaps best positioned to purchase — consumers aged 35-44 and those with middle-to-higher income levels – have indicated even more pessimism than other groups.”

Source: Fannie Mae National Housing Survey.

Although Duncan noted that selling sentiment “remains extremely high, and well above pre-pandemic levels,” the percentage of respondents who said it’s a bad time to sell rose in July, the first time that’s happened since February. While only one in five (20 percent) of respondents thought it was a bad time to sell, the percentage who thought it was a good time to sell also slipped two percentage points from June’s high of 77 percent. At 55 percent, the net share of people who think it’s a good time to sell is now just over half.

The survey also provides insights into consumer sentiment around home prices, mortgage rates, job security and household income:

Home prices: Americans are less certain that recent price increases are sustainable, with only 46 percent now expecting home prices will go up in the next 12 months, down from 48 percent in June and 50 percent in March. The share who think home prices have levelled out increased to 27 percent, while 21 percent think they’ll go down in the next six months. That leaves the net share of people who think prices will go up at 25 percent — the lowest level since September, 2020.

Mortgage rates: With mortgage rates back down near record lows, hardly anyone expects them to fall further. Only one in 20 Americans polled in July (5 percent) thought mortgage rates will go down in the next 12 months. With 57 percent of those polled expecting rates to go up and 31 percent expecting them to stay the same, the net share of Americans who say mortgage rates will go down fell to negative 52 percent.

Job security: The survey found that while most Americans feel secure in their jobs, confidence slipped a bit from June. While 84 percent of those surveyed in July said they weren’t concerned about losing their job in the next 12 months, that’s down from 88 percent in June. The percentage who said they are concerned about losing their jobs increased to 13 percent, leaving the net share of Americans who say they are not concerned about losing their job at 71 percent — still a big improvement from 53 percent in July, 2020.

Household income: While inflation may be driving prices up, survey respondents weren’t seeing corresponding increases in their paychecks. The percentage of Americans who said their household income was “significantly higher” than 12 months ago remained unchanged at 27 percent. The percentage who said their household income was significantly lower increased to 14 percent, while 56 percent said it was unchanged. The net share of those who said their household income was significantly higher in July than it was 12 months ago decreased to 13 percent. That’s down one percentage point from June, but up from seven percentage points from a year ago.

Fannie Mae distills results from the National Housing Survey into a single number, the Home Purchase Sentiment Index (HPSI). The HPSI fell 3.9 points in July, to 75.8, but is up 1.6 points from the same time last year.

Email Matt Carter

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