Despite lower mortgage rates and a strong job market, consumer confidence toward the housing market dipped slightly in June, as fewer Americans said it was a good time to buy a home, according to Fannie Mae’s Home Purchase Sentiment Index.
The net share of survey respondents who said it was a good time to buy a home fell four percentage points compared with May to 23%. That’s down five percentage points compared with June 2018.
The net share of those who said it was a good time to sell a home was flat compared with May at 43%. That’s down four percentage points compared with June 2018.
The share of Americans who said mortgage rates will go down over the next 12 months increased eight percentage points to -29%. That’s up 24 percentage points compared with a year earlier.
The share of survey respondents who said home prices would go up over the next 12 months fell three percentage points to 38%. That’s down eight percentage points compared with a year earlier.
“Growing expectations that mortgage rates will remain steady suggest improved stability for housing affordability and helped keep the HPSI relatively flat this month, despite modest declines in other components,” says Doug Duncan, senior vice president and chief economist at Fannie Mae, in a statement. “Regional variations in housing optimism appear to be tied to a divergence in housing affordability; for example, home purchase sentiment is higher in the Midwest and South than in the West and, to a lesser extent, the Northeast, where the lack of entry-level inventory and the resultant strong price appreciation has had a more profound impact on affordability.
“With fewer consumers expecting rates to jump back up – thereby creating less urgency to buy now – we expect housing market activity to remain stable,” Duncan adds.
The share of respondents who said their household income was significantly higher than it was 12 months earlier decreased one percentage point to 20%. However, that is up one percentage point from the same time last year.
The net share who said they were not concerned about losing their job over the next 12 months decreased three percentage points to 73% – down three percentage points from the same time last year.
In total, the index decreased 0.5 points in June compared with May to a score of 91.5.
Overall, the index was up 0.8 points compared with the same time last year.