Record-Low Think Buying A Home Is A Good Idea

As prices continue to rise those who think now is a good time to buy continues to fall, according to the latest data from the Fannie Mae Home Purchase Sentiment Index…(Fannie Mae)

• The Home Purchase Sentiment Index fell 2.4 points to 71.8 in January.

• The index is down 5.9 points year-over-year and is at its lowest level since May 2020.

Only 25% of respondents thought it was a good time buy which is the lowest level in survey history. With regards to selling, 69% of respondents said it was a good time to do so.

• This is a net negative 45% which is down 5 points from December and down 60 points year-over-year.

QUESTION: How is selling sentiment only at 69%? What are the other 31% waiting for?

Doug Duncan, Fannie Mae Senior Vice President and Chief Economist, said the pessimism is widespread among wannabe homebuyers but more so for younger ones…

• “Younger consumers – more so than other groups – expect home prices to rise even further, and they also reported a greater sense of macroeconomic pessimism. Additionally, while the younger respondents are typically the most optimistic about their future finances, this month their sense of optimism around their personal financial situation declined.”

When it came to mortgage rates, 58% of respondents believed rates were going to rise compared to 4% who thought rates would fall.

GOOD NEWS: 78% of respondents were not concerned about losing their job highlighting the strength of the labor market.