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Record Low — Optimism Due to Shortage of Homes

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Record Low — Optimism Due to Shortage of Homes

Even as the economic conditions are improving, the housing market situation seems to be dipping due to a shortage of housing supply and rising prices.

There was a drop of 2.7 points month over month in Fannie Mae’s Home Purchase Sentiment Index (HPSI) to a reading of 79 in April.

According to the mortgage giant survey’s ten-year history, consumers are skeptical about buying homes.

Fannie Mae Chief Economist Doug Duncan said the lack of supply and Hugh home prices are the main reasons for people’s pessimism.

Duncan noted that consumers with the income range of $50,000 to $100,000, which is the Census Bureau’s reported median household income level, will not be able to afford a home at such competitive rates.

The drop in the home buying activity was somewhat related to the home-selling conditions, which has nearly reached its pre-pandemic level.

Duncan also said that increasing the supply of homes for sale would definitely help in bringing balance to the strong seller’s market, but the most recent data doesn’t suggest that this is likely to happen anytime in the near future.

The highlights of the survey:

  • In April the net share of Americans who said that it is a good time to buy a home dropped 14 percentage points to 47%.
  • And the net share of those who say it’s a good time to sell a home rose by eight percentage points to 67%.
  • There was a decrease of four percentage points to 49% in the share of those who said home prices will increase over the next 12 months.

  • There was an increase of one percentage point to 7% in the net share of Americans who think mortgage rates will go down over the next 12 months.
  • The survey saw a decrease in the share who say they are not concerned about losing their job in the next 12 months by one percentage point to 80%.
  • There is a decrease of six percentage points to 21% share who say their household income is significantly higher than it was 12 months ago.

Reference Source: MPA

https://www.compareclosing.com/mortgagenews/record-low-optimism-due-to-shortage-of-homes/

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