adminA record share of consumers are frustrated by the U.S. housing market and consider the current moment a “bad time to buy,” according to a new survey.
The Fannie Mae Home Purchase Sentiment Index indicated that 85% of respondents surveyed believe it’s a “bad time” to buy a home, with most citing high home prices and high mortgage rates as the primary reasons. That’s up one percentage point from last month.
“Consumers expressed even greater pessimism toward the larger economy this month, in addition to their ongoing frustration with the housing market,” Doug Duncan, senior vice president and chief economist at Fannie Mae, said in a statement
Housing affordability is at the lowest level in 39 years, as buyers find their potential mortgage payment taking up an increasingly large share of their income. The monthly principal and interest payment on a mortgage for a median-priced home has climbed 94% over the last two years, according to one report by Intercontinental Exchange
ICE,
and just surpassed $2,500, the highest since ICE started monitoring the payments in 1975.
Even though the Fannie Mae Home Purchase Sentiment Index was flat in October as compared with the previous month, consumers expressed increasing agitation about how affordable the housing market has become, as well as concerns about the rising cost of living. Pointing to inflation, 78% of respondents said they believe that the economy is “on the wrong track,” Fannie Mae’s survey showed, which was up 7 percentage points from the previous month. Consumers expressed those feelings even as they reported better job security and improved household income, Fannie Mae noted.
In contrast to would-be home buyers, homeowners are feeling pretty good about their situation, with 63% believing it’s a “good time” to sell a home, unchanged from the previous month.
The survey also indicated that 40% consumers are expecting home prices to go up in the next 12 months, down from 42% the previous month.
Even as 30-year fixed-rate mortgages inch down from the 8% range, respondents expect rates to further increase in the months to come. Some 47% of survey respondents said that they expect mortgage rates to go up in the next 12 months, up from 46% the previous month.
The 30-year mortgage rate was averaging at 7.48%, according to a daily rate survey by Mortgage News Daily as of November 6.
Read the full article here
