Rising mortgage rates and home prices are creating challenges for many homebuyers, with 86% saying May is not a time to buy a home — the highest level since a Fannie Mae survey began in 2010.
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Nearly nine in 10 Americans say May is not a time to buy a home, according to a survey by mortgage giant Fannie Mae – the highest level recorded since the survey began in 2010.
Fannie Mae’s monthly National Housing Survey also found that nearly two-thirds of household financial decision-makers believe now is a good time to sell.
But Doug Duncan, chief economist at Fannie Mae, said rising mortgage rates and home prices have created affordability challenges for many homebuyers, and many have given up hope that home prices will fall next year.
Doug Duncan
“While many respondents expressed optimism at the start of the year that mortgage rates would fall, that simply did not happen, and current sentiment reflects pent-up frustration over an overall lack of affordability,” Duncan said in a statement. ” The clearest evidence is that our ‘good time to buy’ component fell to a new survey low this month.”
Source: Fannie Mae National Housing Survey, May 2024.
Only 14% of respondents surveyed in May said now was a good time to buy, down from 20% in April and a new survey low for November 2023. 79% An increase of 86% of respondents said that May is a good time to buy, a decrease of 13 percentage points from April to May to -72%, a new survey low.
“On the other hand, homeowners’ perceptions of home sales conditions have declined only slightly, remaining largely positive after rising steadily over the past few months,” Duncan said. “This suggests to us that despite the so-called ‘lockdown effect,’ , but some homeowners may increasingly want or need to sell their homes for a variety of non-financial reasons, which could lead to an increase in listings in the near future.
Source: Fannie Mae National Housing Survey, May 2024.
While 64% of those surveyed in May said now was a good time to sell, that was down from 67% in April, which was the highest level in nearly two years.
As the proportion who believe now is not a time to sell increased from 32% to 35%, the net proportion who believe that May is a time to sell fell 6 percentage points from April to 29%.
Source: Fannie Mae National Housing Survey, May 2024.
The Fannie Mae Home Buying Confidence Index (HPSI), which distills six questions from the National Housing Survey into a single number, fell 2.5 points from April to May to 69.4. Although up 3.8 points from a year ago, the index was often above 90 before the outbreak.
The HPSI plunged at the start of the pandemic, rebounded when low mortgage rates boosted sales, and then began to deteriorate again in 2022 when mortgage rates began to rise.
Three of the six components of the HPSI fell in May – buying conditions, selling conditions and unemployment concerns – while two improved: changes in household incomes and the outlook for house prices. The outlook for consumer mortgage rates remained unchanged from April to May.
Source: Fannie Mae National Housing Survey, May 2024.
The net proportion of consumers who said home prices will rise in the next 12 months increased by 2 percentage points from April to May, reaching 25%. More than eight in 10 respondents expect house prices to either increase (42%) or remain the same (40%). Only 18% said they expected house prices to fall over the next 12 months.
Source: Fannie Mae National Housing Survey, May 2024.
While 25% of those surveyed in May said they expected mortgage rates to fall over the next 12 months, this was down from 26% in April. The share expecting mortgage rates to rise also fell to 31%, while the net share expecting mortgage rates to fall remained unchanged at -6%.
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