Fannie Mae Shows Consumer Sentiment Plateauing

The latest monthly update to the Fannie Mae Home Purchase Sentiment Index (HSPI)–for April 2024–shows the index at 71.9 percentage points (representative of how many consumers think now is a good time to buy). The rating is unchanged from March 2024 and 5.1 points higher from April 2023. 

In a release, Fannie Mae described these results as a “plateau,” suggesting potential homebuyers have accepted high prices and mortgage rates for the time being.

Key details:

  • 20% of respondents said now is a good time to buy a home–79% said now is a bad time to buy a home.
  • The net percentage in month-over-month change is 1% less people think now is a good time to buy a home.
  • 67% of respondents said now is a good time to sell a home, while 32% said now is a bad time to sell. This marks a 3% increase in favorability of selling month-over-month.
  • 42% of respondents expect home prices will go up in the next 12 months (compared to 40% last month). 18% say home prices will go down (from 20% the previous month) while 39% said home prices will stay the same (compared to 38% the previous month). 
  • 76% of respondents said they are concerned about losing their job (down from 77% the previous month), while 23% said they are unconcerned (unchanged from the previous month).
  • 17% said their household income is higher than it was 12 months ago, 12% said their household income is lower, and 70% said their income is unchanged.

Expert opinion:

“Overall, housing sentiment increased from November through February, driven largely by consumer belief that mortgage rates would move lower. However, recent data showing stickier-than-expected inflation, rising mortgage rates, and continued home price appreciation appear to have given consumers pause regarding the market’s direction,” said Doug Duncan, Fannie Mae senior vice president and chief economist.

“While only 20% of consumers think it’s a good time to buy a home, 67% think it’s a good time to sell one, a share that’s moved steadily upward since the start of the year. We think consumers’ generally improved sense of home-selling conditions bodes well for listings and housing activity, particularly for the segment of the population who may need to move for lifestyle reasons and have already begun adjusting their financial expectations to the current mortgage rate and price environment. However, for potential homebuyers in less of a rush to transact, ongoing affordability challenges may continue to keep many of them on the sidelines – one reason why we expect home sales to tick up only gradually over the course of the year.”

For the full Fannie Mae report, click here.

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