Americans’ attitudes on homeownership have slightly softened, as appreciation in the housing market weakens, according to an industry measure.
The Fannie Mae Home Purchase Sentiment Index® (HPSI), a gauge of housing market optimism, fell 0.4 percentage points last month, as buyer confidence remained stubbornly unchanged, and confidence on the part of sellers slid five percentage points. In February, 15 percent of homebuyers and 30 percent of homeowners were optimistic about their prospects.
Furthermore, Americans believe home prices are slowing. In February, 33 percent were confident prices will rise—a three-percentage point lift from January, but a 12-percentage point slip from Feb. 2018.
“The HPSI held steady in February, as consumers’ continuing optimism about economic conditions seems to be balanced with softening attitudes toward the housing market,” says Doug Duncan, senior vice president and chief economist at Fannie Mae. “Job confidence reached a new survey high, but consumers were less optimistic about home-buying and -selling conditions than they were a year ago. Notably, home price growth expectations have trended significantly downward, with the net share of consumers expecting home prices to rise falling 19 percentage points from its survey high established at the start of 2018.”
According to Duncan, buyers could simply be waiting it out.
“While declining home price expectations may point to improving affordability, the share of consumers who think it’s a bad time to buy has grown over the last year, and high home prices remain the most frequently cited concern,” Duncan says. “It is plausible that consumers believe that price gains could decelerate further, making it worthwhile to wait rather than act now.”
Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at firstname.lastname@example.org.