Consumer sentiment toward the housing market dipped 1.5 points in April to a score of 88.3 on Fannie Mae’s Home Purchase Sentiment Index, as fewer survey respondents said now is a “good time to buy” a home.
The decrease comes after the index saw a 5.5 point jump in March.
The share of survey respondents who said it is a “good time to buy” a home fell eight percentage points to 14%. This component is down 15 percentage points from the same time last year.
The dip in the “good time to buy” category comes despite the fact that more survey respondents think mortgage rates will remain favorable.
The net share of respondents who said they expect mortgage rates to go down over the next 12 months increased a total of 12 percentage points over March and April.
“Households remain upbeat about economic activity but have more mixed attitudes toward the housing market,” says Doug Duncan, senior vice president and chief economist at Fannie Mae, in a statement. “While home selling confidence remains strong and more consumers on net expect mortgage rates to decline over the next year, respondents walked back some of their buying optimism from March.
The share of survey respondents who said it is a good time to sell a home remained unchanged at 43%. This component is down two percentage points compared with the same time last year.
The share of those who said home prices will go up decreased two percentage points to 36%. This component is down 13 percentage points from the same time last year.
The net share who said mortgage rates will go down over the next 12 months increased five percentage points to -40%. This component is up eight percentage points from the same time last year.
The share who said that their household income was significantly higher than it was 12 months ago increased two percentage points to 22%. This component is up four percentage points compared with the same time last year.
“Improving perceptions of income gains and a softening home price growth outlook should help support housing demand,” Duncan adds. “However, increasing expectations among consumers that mortgage rates will continue to be favorable for some time will likely gain additional support following last week’s Fed meeting – and may also be reducing their urgency to buy.”