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Nine Out Of 10 Americans Agree: May Was A Bad Time To Buy A Home | Black Kite Express

High mortgage rates and home prices are creating challenges for many homebuyers, and 86% said May was a bad time to buy, a new high in Fannie Mae surveys dating back to 2010.

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Nearly nine in 10 Americans surveyed by mortgage giant Fannie Mae said May was a bad time to buy, a new high in survey records dating back to 2010.

Fannie Mae’s monthly National Housing Survey also found that nearly two-thirds of household financial decision makers thought it was a good time to sell.

But high mortgage rates and home prices are creating affordability challenges for many homebuyers, and many have given up hope they will decline next year, said Fannie Mae Chief Economist Doug Duncan.

David Duncan

“While many respondents expressed optimism earlier in the year that mortgage rates would drop, that simply hasn’t happened, and current sentiment reflects pent-up frustration over the overall lack of affordability of purchases,” Duncan said in a statement. “This was most clearly evidenced when our ‘good time to buy’ component fell to a new survey low this month.”

Source: Fannie Mae National Housing Survey, May 2024.

Only 14 percent of respondents in May said it was a good time to buy, down from 20 percent in April, matching a survey low last seen in November 2023. The percentage who said May was a bad time to buy rose from 79 percent Against a new survey record of 86 percent, the net proportion saying May was a good time to buy fell 13 percentage points from April to May, to -72 percent, a survey minimum.

“On the other hand, homeowners’ perception of home selling conditions decreased only slightly and remains largely positive after a steady increase in recent months,” Duncan said. “This suggests to us that, despite the so-called ‘lock-in effect’, some homeowners may increasingly want or need to sell their homes for a host of non-financial reasons, which may lead to an increase in properties for sale. sale in the coming years.”

Source: Fannie Mae National Housing Survey, May 2024.

While 64 percent of respondents in May said it was a good time to sell, that number is down from 67 percent in April, which was the highest level in nearly two years.

As the percentage who said it is a bad time to sell increased from 32 percent to 35 percent, the net share of those who said May was a good time to sell decreased 6 percent from April, to 29 percent. .

Source: Fannie Mae National Housing Survey, May 2024.

The Fannie Mae Home Buying Sentiment Index (HPSI), which summarizes six questions from the National Housing Survey into a single number, decreased 2.5 points from April to May, to 69.4. While that’s 3.8 points higher than a year ago, the index used to be above 90 before the pandemic.

The HPSI plunged at the start of the pandemic, recovered as low mortgage rates boosted sales, and then began to deteriorate again as mortgage rates began to rise again in 2022. The HPSI hit a record low of 56.7 in October of 2022.

Three of the six components of the HPSI declined in May (purchasing conditions, selling conditions, and concerns about job loss), while two components improved: the change in household income and the outlook for home prices. . The outlook for consumer mortgage rates remained unchanged from April to May.

Source: Fannie Mae National Housing Survey, May 2024.

The net share of consumers who said home prices will rise over the next 12 months rose 2 percentage points from April to May, to 25 percent. More than eight in 10 respondents expected home prices to increase (42 percent) or stay the same (40 percent). Only 18 percent said they expected home prices to fall in the next 12 months.

Source: Fannie Mae National Housing Survey, May 2024.

Although 25 percent of respondents in May said they expected mortgage rates to drop in the next 12 months, that number is down from 26 percent in April. While the percentage expecting mortgage rates to rise also decreased to 31 percent, the net share of those who think mortgage rates would go down remained unchanged at -6 percent.

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Email Matt Carter.

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