Homebuyer Sentiment Ticks Up – First Time Since March
More consumers are starting to think home price increases have largely topped out – and if they still hope to snag a low interest rate, it’s time to shop for a home.
WASHINGTON – The net share of Americans who think it’s a good time to buy a home increased by seven percentage points in August, according to Fannie Mae’s National Housing Survey.
The nation’s potential buyers still have big reservations about buying, and worries over the delta variant and inflation could derail the economy because it’s dinged other consumer confidence indexes. August’s number wasn’t even all that strong – -31% – but it’s noticeably stronger than then -38% recorded in July, a historic low.
The survey also found that a growing number of U.S. consumers have doubts that home prices will keep going up – but most remain convinced that mortgage rates probably will.
Meanwhile, the net share of those who thought it was a good time to sell also slipped. The percentage of those who said it’s a good time to sell dropped by two percentage points to 73%, though that’s still not far off June’s high of 77%.
And the percentage who said it was a bad time to sell also fell by one percentage point to 19%.
The net share of consumers who said home prices will go up over the next 12 months dropped by nine percentage points in August to 16%, continuing a trend seen over the last several months. Only 40% of renters and homeowners surveyed by Fannie Mae expect home prices to go up in the next 12 months, down from 46% in July.
While only 24% expect prices to fall, one out of three (31%) think prices have stabilized and will stay the same over the next 12 months.
Despite talk of Fed tapering, which can indirectly affect the direction of mortgage rates, the net share of Americans who think mortgage rates will go down over the next 12 months increased by five percentage points in August, though only 6% of those surveyed think rates will actually fall in the next 12 months.
Overall, another one of three respondents expect mortgage rates to stay where they are now, though more (53%) think rates will go up. Still, that percentage is down from the 57% recorded in July.
In a forecast released last month, Fannie Mae economists projected that rates for 30-year fixed-rate loans will rise to 3.2% by the end of next year.
Source: Inman (09/07/21) Carter, Matt
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