Continuing optimism about the direction of the economy and the job market belies the downward movement in overall consumer sentiment about the housing market for February, Fannie Mae said.
Its Home Purchase Sentiment Index declined for the third time in the last fourth months, falling to 76.5 from 77.7
This turned around from one year prior, when
While overall sentiment about housing recovered a bit in ensuing months, 48% said February was a good time to buy a home, down from 52% in January, while 43% responded it was a bad time to buy, growing from 38%. This marks the narrowest gap since last April’s spread of 2% in favor of those who considered it a good time to buy.
When it comes to selling a home, 55% said February was a good time, down from 57% in January. A 35% share said February was a bad time, up from 33% the previous month.
But consumers' outlook regarding employment, especially for lower-income and/or renters, is the primary reason for optimism about the near-term future of the housing market, said Fannie Mae Chief Economist Doug Duncan.
“With the growing likelihood that lockdown restrictions will continue easing as vaccination efforts ramp up, and with warmer weather on the horizon and another round of fiscal stimulus pending, these two segments of consumers may have good reason to feel more positive about the labor market," Duncan said in a press release. "This optimism appears to be well-placed, too, given
But other HPSI components remain below their pre-pandemic levels, which leaves room for improvement in consumers' sentiment about the housing market in the coming months. But that could be dependent on
Respondents who are not concerned about losing their job in the next 12 months rose to 82% in February from 75% in January. Meanwhile, the percentage who say they are concerned decreased to 17% from 24% in the same period.
The share of respondents that believe rates will rise in the next 12 months increased in February to 47%, from 45% in January. Another 38% said they expected rates to remain at current levels, up from 37% in January. However, the percentage that believe rates will go down in the next 12 months fell to 8% from 9% the previous month.
When it comes to
The percentage that expected prices to fall increased slightly to 18% in February from 17% in January. There was a five percentage point decline in those that think prices will remain unchanged over the next 12 months, to 29% in February from 34% in January.