If this continues, “we expect to see an even greater cooling in the housing market than expected”: Fannie Mae.
By Wolf Richter for WOLF STREET.
We simply knew it would happen, given skyrocketing home prices and soaring mortgage rates: Homebuyer sentiment deteriorated to a new low.
The percentage of people who said it was a “bad time to buy” a home rose to 73%, another record high in data dating back to 2010, according to Fannie Mae’s National Housing Survey for March, published today. Sentiment started to deteriorate sharply in February 2021.
“If consumer pessimism about home buying conditions continues and recent mortgage rate increases hold, we expect an even greater cooling in the housing market than expected,” Fannie Mae said in the report.
The percentage of people who said it was a “good time to buy” a home plunged to an all-time high of 24%.
The combination of ridiculously skyrocketing home prices and mortgage rates that the Fed is now trying to push higher in order to rein in the ridiculously high price spike is toxic to potential buyers. The average 30-year fixed mortgage rate, according to the Mortgage Bankers Association’s weekly index, jumped almost 2 percentage points from September last year, when mortgage rates were still near their lows. historical:
The economy is on the wrong track, for the most part: inflation?
“This month, we also saw a high proportion of consumers expecting their financial situation to deteriorate over the next year; this was especially true among current owners,” the report said.
Inflation, which is worsening the mood of consumers everywhere, could have something to do with it: the percentage of consumers who said the economy is on the wrong track jumped 5 percentage points to 73%, according to the Fannie Mae survey from 51% in March last year. The wave of fake trackers began in May when consumers became aware of their unpleasant new companion in everyday life: the worst inflation many people have ever experienced as adults.
The percentage of people who said the economy was on track fell 3 percentage points to 21%.
“These concerns, along with rising mortgage rates since late 2021, will likely reduce demand for mortgages from upper-tier buyers – and fewer upper-tier buyers mean fewer entry-level homes available, which which adds to rising rate challenges for potential first-time home buyers,” the report said.
But it’s a great time to sell a house.
Given sky-high prices and still very low supply, and the ease with which a home can still be sold without jumping through all sorts of hoops, the percentage of people who said it was now the “right time to sell” rose to 74%, in the same all-time high range since June last year. So… do it! Get it to market…before anyone else.
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