82% of consumers said it’s a “bad time to buy” a home in Fannie Mae’s July survey – an all-time low. And those saying “good time to buy” dropped from 22% to 18%.

WASHINGTON – Fannie Mae’s Home Purchase Sentiment Index (HPSI) increased slightly in July, though consumers’ growing confidence about their personal financial situations was largely offset by additional pessimism about homebuying conditions.

Half of the HPSI’s six components rose month-to-month, but more than four out of five consumers (82%) said that it’s a “bad time to buy” a home – a new survey high and up from 78% in June. The full index is up 4.0 points year over year.

“While consumers are reporting confidence in the components related to their personal financial situations, it’s unlikely we’ll see housing sentiment catch up to other broader economic confidence measures until there is meaningful improvement to home purchase affordability,” says Doug Duncan, Fannie Mae senior vice president and chief economist.

“In July, a significant majority of consumers indicated that their jobs are stable and that their incomes are the same or better than they were twelve months ago,” he says, even as buying attitudes hit an all-time low.

“Unsurprisingly, consumers continue to attribute the challenging conditions to high home prices and unfavorable mortgage rates,” Duncan adds. “Further, the share of consumers expecting home prices to continue to rise has also been on a steady climb since March, which may only add to perceptions of unaffordability.”

Duncan also notes some stagnation in the “good time to sell” component. That, he suggests, means “the current low levels of existing homes for sale will likely continue to persist in the near term, as also reflected in our latest forecast.”

Home Purchase Sentiment Index highlights for July

  • The HPSI increased in July by 0.8 points to 66.8, and it’s up 4.0 points year-to-year.
  • Good/bad time to buy: The percentage of respondents who say it’s a good time to buy a home decreased from 22% to 18%; the percentage who say it is a bad time to buy increased from 78% to 82%.
  • Good/bad time to sell: The percentage who say it’s a good time to sell was unchanged at 64%; the percentage who say it’s a bad time to sell was also unchanged at 36%.
  • Home price expectations: The percentage expecting home prices to go up in the next 12 months increased from 36% to 41%; the percentage saying prices will go down decreased from 26% to 24%.; the share who think home prices will stay the same decreased from 37% to 34%.
  • Mortgage rate expectations: The percentage who say mortgage rates will go down in the next 12 months remained unchanged at 16%, while the percentage who expect mortgage rates to go up decreased from 47% to 45%, and the share who think mortgage rates will stay the same increased from 36% to 38%.
  • Job loss concerns: The percentage who say they’re not concerned about losing their job in the next 12 months increased from 77% to 80%; the percentage who say they are concerned decreased 2 percentage points, from 22% to 20%.
  • Household income: The percentage who say their household income is significantly higher than it was 12 months ago remained unchanged at 19%, while the percentage who say their household income is significantly lower was unchanged at 10%, and the percentage who say their household income is about the same remained unchanged at 71%.

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Author: kerrys