Consumer confidence in the housing market was decidedly mixed in the latest Home Purchase Sentiment Index data published by Fannie Mae (OTCQB: FNMA).
The index dropped by 1.1 points in July to 71.5, with only 17% of consumers stating now is a good time to buy a home, down from 19% in June. The share of consumers believing now is a good time to sell decreased from 66% to 65%.
But not all the data was sour. The percentage of respondents who said home prices will go up in the next 12 months decreased from 45% to 41%, while the percentage who say home prices will go down increased from 17% to 21%. The share who thought home prices will stay the same increased from 36% to 37%.
Also, the percentage of respondents who said mortgage rates will go down in the next 12 months increased from 24% to 29%, while the percentage who expect mortgage rates to go up decreased from 33% to 31% and those who believe mortgage rates will stay the same decreased from 42% to 38%.
“While we’re seeing signs that affordability may be improving in certain parts of the country as supply slowly comes online, household incomes remain stretched relative to would-be mortgage or rent payments, and our latest survey once again reflects real consumer frustration with the housing market,” said Doug Duncan, Fannie Mae senior vice president and chief economist, who added the government-sponsored enterprise is “forecasting home price growth to decelerate through next year and mortgage rates to average 6.2% by the fourth quarter of 2025 – and, like consumers, we continue to view affordability as the primary constraint to home sales activity. One data point we think bears monitoring: The share of respondents who say they would rent, rather than buy, on their next move has been trending slowly upward of late. Right now, it’s difficult to tell if this reflects simple buyer fatigue or a greater sense of disenchantment with the market, but we think it could have important implications should the trend continue.”
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