Consumer Confidence in Housing Market Plummeted in March

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Consumer confidence in the housing market dropped significantly in March due to the economic turmoil inflicted by the coronavirus pandemic.

As such, Fannie Mae’s Home Purchase Sentiment Index (HPSI) fell 11.7 points to a score of 80.8.

That’s the lowest reading since December 2016.

Driving the decrease was a sharp increase in the share of survey respondents who said they were concerned about losing their job, which jumped to 23%, up from 13% in February.

Doug Duncan, senior vice president and chief economist for Fannie Mae, says Americans are “reporting greater concern about their job security than at any point in the last six years.”

“Attitudes about the current home-selling environment deteriorated markedly, falling to their lowest level since January 2017,” Duncan says. “A survey record one-month drop in optimism about the direction of the economy appears to have weakened consumers’ views of both the current home-selling and home buying environment, though the latter is likely buffered in part by low mortgage rates.

“When asked why it’s a bad time to buy or sell a home, approximately seven percent of consumers offered COVID-19 as an unprompted response, one of the highest percentages of non-standard answers in the survey’s history,” Duncan says. “We expect these developments to weigh heavily on housing activity during the spring/summer home buying season.”

The percentage of Americans who say it is a good time to buy decreased from 59% to 56%, while the percentage who say it is a bad time to buy increased from 32% to 36%.

As a result, the net share of Americans who say it is a good time to buy decreased seven percentage points.

The percentage of Americans who say it is a good time to sell decreased from 67% to 52%, while the percentage who say it’s a bad time to sell increased from 22% to 36%.

As a result, the net share of those who say it is a good time to sell decreased 29 points.

The percentage of Americans who say their household income is significantly higher than it was 12 months ago decreased from 32% to 27%, while the percentage who say their household income is significantly lower remained the same at 11%.

The percentage who say their household income is about the same increased from 56% to 61%.

As a result, the net share of those who say their household income is significantly higher than it was 12 months ago decreased five percentage points.

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