US Housing Market: 82% of Consumers Believe Now Is a Bad Time to Buy a Home

Consumers across the United States have expressed growing concerns about the current state of the housing market, with a record-breaking 82% reporting that it is a "bad time to buy" a home.

Consumers across the United States have expressed growing concerns about the current state of the housing market, with a record-breaking 82% reporting that it is a "bad time to buy" a home. This sentiment has been captured by Fannie Mae's home purchase sentiment index (HPSI), which tracks consumer confidence in the housing market. Despite a slight increase of 0.8 points to 66.8 in July, the overall indicator remains relatively low.

While consumers have demonstrated increased confidence in their personal financial situations, this positivity has been overshadowed by greater pessimism towards home-buying conditions. The HPSI reveals that a staggering 82% of consumers view the current market as unfavorable for buying a home, marking a significant rise from the 78% reported in the previous month.

According to Fannie Mae's survey, the job security component and home price expectations component saw month-over-month improvement. However, it is worth noting that only 18% of respondents expressed a positive outlook on the current housing market, highlighting the continued decline in homebuying sentiment.

In addition to the prevailing negative sentiment among buyers, home prices are experiencing a steady upward trend in various regions, particularly the Midwest and Northeast markets. Black Knight's monthly mortgage monitor report indicates a 0.67% increase in home prices nationwide in June on a seasonally adjusted basis. The annual home price increase also rose to 0.8% in June, up from 0.2% in May.

Although 64% of respondents believe it is a favorable time to sell a home, with 36% expressing the opposite sentiment, Fannie Mae's Economic & Strategic Research (ESR) group emphasizes the scarcity of existing homes available for sale as a defining feature of today's housing market. This limited inventory situation is expected to persist, leading the ESR group to predict that overall home sales in 2023 will remain near their lowest annual level since 2009.

As prospective buyers face soaring home prices and diminishing supply, sellers may find this a propitious time to list their properties. However, the challenges posed by fluctuating market conditions must be taken into account. It is important for homeowners to conduct thorough research and consult with real estate professionals who can navigate this complex landscape.

The current sentiment among consumers in the United States reveals growing skepticism and wariness towards investing in the housing market. Factors such as rising home prices and limited inventory have contributed to this general sentiment of caution. As the housing market evolves, potential buyers and sellers should remain vigilant and seek professional guidance to make informed decisions.