Confidence in housing is waffling between homebuyers who are uncertain about their opportunities and sellers who are positive about their prospects, according to the recently released Fannie Mae Home Purchase Sentiment Index® (HPSI) for March.
The HPSI declined 3.8 percentage points to 84.5 last month, down from an all-time Index high in February. Those surveyed who reported it being “a good time to buy a house” dove 10 percentage points to 30 percent, but those surveyed who reported it being “a good time to sell” floated up nine percentage points to 31 percent—a first, and another high.
“Home purchase sentiment gave back some of the gains accumulated over the prior two months that sent the Index to its survey high in February,” says Doug Duncan, senior vice president and chief economist at Fannie Mae. “Strong home price appreciation has turned into a double-edged sword for the housing market as it boosted the net share of consumers saying it’s a good time to sell to a record high, surpassing the plunging good time to buy indicator for the first time in the history of the survey.”
Those surveyed who believe home prices will rise dipped down one percentage point to 44 percent. Home prices were cited as the most important reason for both homebuyers’ and sellers’ sentiments.
Less of those surveyed believe mortgage rates will go down in the next 12 months, dribbling five percentage points to -60 percent—a low.
Both findings point to a spring season with the potential for more supply, which has utterly failed to keep up with demand.
“The net share of consumers who expect mortgage rates to rise over the next year exceeded that experienced during the 2013 taper tantrum,” Duncan says. “However, the housing market could get some tailwinds from a seasonal rise in for-sale inventory, particularly as some sellers seek to lock in profits from recent rapid home price gains. The market could also get a boost from homebuyers who decide to jump into the market before rates rise further.”
Source: Fannie Mae
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