Consumer Disconnect: Good Time To Sell, Bad Time To Buy
Fannie Mae survey finds 67 percent of Americans agree that it’s a good time to sell, the highest level in nearly 2 years. But only 20 percent say it’s a good time to buy.
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More than two-thirds of Americans polled by Fannie Mae in April said it was a good time to sell a home — the highest level in nearly two years. But would-be homebuyers remain less than thrilled about their prospects, with only 20 percent of consumers saying it was a good time to buy.
Fannie Mae’s latest National Housing Survey, a monthly poll of more than 1,100 household decision makers, found consumers were more certain than they were in March that home prices will keep climbing, and less certain that mortgage rates will come down.
More Americans are getting nervous about keeping their jobs, and fewer said that their income is much higher than it was a year ago.
Doug Duncan
“Overall, housing sentiment increased from November through February, driven largely by consumer belief that mortgage rates would move lower,” Fannie Mae Chief Economist Doug Duncan said in a statement. “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.”
Source: Fannie Mae National Housing Survey, April 2024.
The Fannie Mae Home Purchase Sentiment Index, which distills six questions from the National Housing Survey into a single number, was unchanged from March to April at 71.9, but up 5.1 points from a year ago. Before the pandemic, the index was often above 90 and hadn’t been below 80 since 2014.
Source: Fannie Mae National Housing Survey, April 2024.
Most consumers (67 percent) agreed that April was a good time to sell, up from 66 percent in March, and the share who said it was a bad time to sell dropped from 34 percent to 32 percent. The net share of those who said it was a good time to sell increased three percentage points from March to April and 12 percent from a year ago.
“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,” Duncan said.
Source: Fannie Mae National Housing Survey, April 2024.
Homebuyer sentiment declined slightly in April, with only 20 percent saying it was a good time to buy, down from 21 percent in March. With the percentage saying it was a bad time to buy unchanged at 79 percent, the net share of those who said it was a good time to buy fell by one percentage point from March to April and was down 5 percent from a year ago.
The percentage saying it was a good time to buy hit an all-time low of 14 percent in November 2023, when mortgage rates were near 2023 highs.
Ongoing affordability challenges may continue to keep many would-be homebuyers who aren’t in a rush on the sidelines, Duncan said, “one reason why we expect home sales to tick up only gradually over the course of the year.”
Last month Fannie Mae economists predicted that growth in new listings coming onto the market should help boost 2024 sales of existing homes by 4.3 percent, to 4.27 million, followed by more dramatic 10 percent growth in 2025 sales to 4.69 million.
Fannie Mae economists projected a similar trajectory for growth of new home sales, which are forecast to rise by 4 percent in 2024 to 693,000 homes and by 12.8 percent in 2025 to 782,000 homes.
Source: Fannie Mae National Housing Survey, April 2024.
With mortgage rates again on the rise in April, only 26 percent of consumers said they expected rates to come down in the next 12 months, compared to 29 percent in March. But the percentage who expected rates to go up in the next year also fell by a percentage point from March to April, to 33 percent.
Four in 10 (40 percent) of consumers think rates will stay the same over the next year, up from 36 percent in March. The net share who expect mortgage rates to come down dropped 1 percentage point from March to April but was up 20 percentage points from a year ago.
Source: Fannie Mae National Housing Survey, April 2024.
Consumers were increasingly convinced in April that home prices will keep going up over the next 12 months (42 percent) rather than down (18 percent), although 39 percent think they’ll remain unchanged. The net share of those expecting home prices to rise in the next year was up three percentage points from March to April, and 18 percentage points from a year ago.
Source: Fannie Mae National Housing Survey, April 2024.
Few Americans who have jobs said they were concerned about losing them in the next 12 months (23 percent), although the percentage who said they were not concerned dropped from 77 percent in March to 76 percent in April. The net share who were not concerned about losing their job was down two percentage points from March to April, and six percentage points from a year ago.
Source: Fannie Mae National Housing Survey, April 2024.
While Federal Reserve policymakers remain concerned about inflation and wage growth, only 17 percent of consumers said their income was higher than it was a year ago, down from 19 percent in March. Most Americans (70 percent) said their income was unchanged from a year ago.
The net share who said their income was higher than a year ago decreased by two percentage points from March to April and was down eight percentage points from a year ago.
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