With coronavirus worries keeping mortgage rates low and consumers expecting home prices to top out, the share of those feeling optimistic about the housing market increased in August, according to the latest Fannie Mae Home Purchase Sentiment Index.
The share of consumers who felt it was a good time to buy a home climbed to 32% from July’s all-time low of 28%. That represents the first monthly uptick since March, but still remains a far cry from the 59% share in August of 2020. Despite the past months of record-setting home price growth, borrowers anticipate value appreciation to level off in the next 12 months, according to Mark Palim, Fannie Mae vice president and deputy chief economist.
A net 16% expect rising values over the next year, down from 25% in July and up from 7% in August 2020. Meanwhile, the current sky-high prices and ongoing inventory shortage led 73% of surveyees to say August was a good time to sell a home, edging down from July’s 75% but up from 48% a year ago.
“The continued strength of demand for housing and favorable home-selling conditions may be offsetting broader concerns about the delta variant and inflation that have negatively impacted other consumer confidence indices," Palim said in the report.
A 67% net share of consumers didn’t have job loss anxiety, falling in between July’s 71% and August 2020’s 56%. A net 14% reported significantly higher household income over the past year, up monthly from 13% and annually from 9%. Lastly, a net 47% predicted increasing mortgage rates over the next year, down from 52% in July and 16% the year prior.
As most of the index’s component movements negated each other, the overall score merely inched down to 75.7 in August from 75.8 in July and sat below the 77.5 from one year earlier.
