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Seventy-seven percent of consumers say it’s a good time to sell a home—a record high, according to Fannie Mae’s Home Purchase Sentiment Index, a survey of 1,000 adults on their views of the housing market.
They have plenty of reason to feel so upbeat: Existing-home sales prices were at a record high in May and up nearly 24% compared to a year earlier ($350,300), according to the National Association of REALTORS®. The higher home prices have translated into greater equity for home sellers. In the first quarter of 2021, the average homeowner saw their equity climb nearly 20% in the past year, gaining about $33,400, according to a report from CoreLogic.
Meanwhile, home buyers aren’t feeling as good about the housing market. Sixty-four percent of consumers say it’s a bad time to buy a home, up from 56% the previous month—also a record high, Fannie Mae reports.
The “buy and sell components continued to diverge,” Doug Duncan, Fannie Mae’s senior vice president and chief economist, said about the latest consumer sentiment index readings. “Consumers also continued to cite high home prices as the predominant reason for their ongoing and significant divergence in sentiment toward homebuying and homeselling conditions.”
Renters who are planning to purchase a home in the next few years have demonstrated the steepest decline in homebuying sentiment than homeowners, Duncan adds. “It’s likely that affordability concerns are more greatly affecting those who aspire to be first-time homeowners than other consumer sentiments who have already established homeownership,” Duncan says.
Despite the pessimism over homebuying, “we expect demand for housing to persist at an elevated level through the rest of the year,” Duncan notes. “Mortgage rates remain not too far from their historical lows, and consumers are expressing even greater confidence about their household income and job situation compared to this time last year, when the pandemic had shut down wide swaths of the economy.”
Here are more highlights from Fannie Mae’s Home Purchase Sentiment Index:
77% of consumers said it’s a good time to sell, up from 67% last month. Fifteen percent of respondents said it’s a bad time to sell.
64% of consumers said it’s a bad time to buy a home, up from 56% last month. Thirty-two percent of respondents said it’s a good time to buy a home.
48% of respondents said they expect home prices to rise over the next 12 months, up from 47% last month.
57% of respondents expect mortgage rates to go up over the next 12 months, up from 49% last month. Thirty percent expect mortgage rates will stay the same and 6% expect rates to decrease.
88% of consumers say they are not concerned about losing their job over the next 12 months, up slightly from 87% last month.
27% of respondents say their household income is significantly higher than it was 12 months ago, a drop from 29% last month. Fifty-six percent of respondents say their household income is about the same as last year while 13% say their household income is significantly lower.
Source: “Consumers Increasingly Adamant That It’s a Good Time to Sell, Bad Time to Buy a Home,” Fannie Mae (July 7, 2021)