Housing sentiment falls to lowest in a year, as more say now is not a good time to buy: Fannie Mae
- Consumer attitudes toward both buying and selling homes dropped, with the former falling the most of all the six survey components, a sizable 5 percentage points. It tied its second lowest reading in the survey’s history.
- Fewer consumers now expect home prices to rise, echoing other surveys that have shown a drop in the number of people who think owning a home is currently a good investment.
- Fewer consumers believe mortgage rates will fall back to recent lows.
What a difference a few seasons make.
Housing sentiment fell to its lowest level in a year in October, according to a monthly survey by Fannie Mae. Consumer attitudes toward both buying and selling homes dropped, with the former falling the most of all the six survey components — a sizable 5 percentage points. That tied the survey’s second lowest reading in its history.
The data are a sharp turnaround from last spring, when confidence in the U.S. housing market was soaring, mortgage rates were relatively low and the economy was flying high.
Fewer consumers now expect home prices to rise, echoing other surveys that have shown a drop in the number of people who think owning a home is currently a good investment. Home prices are still gaining, but those increases have been shrinking each month: They’ve fallen below 6 percent annually for the first time in a year, according to the much-watched S&P CoreLogic Case-Shiller home price index.
As Mortgage Rates Hit 8-Year Highs, Mortgage Applications Hit 18-Year Low
It’s pretty simple. If you had any interest in buying a house, any interest at all, you bought a house when ZIRP-driven mortgage rates were near all-time lows. Now, with sellers still holding out for unrealistic prices, the true extent of the massive demand falloff is becoming rapidly apparent. Next? Price cutting and the rush to the exit.