The surge in COVID-19 transmission and deaths dragged down consumer confidence in the housing market for December, according to Fannie Mae.
The Home Purchase Sentiment Index fell for the second month in a row to 74 from
Selling sentiment took the biggest hit, plummeting month-over-month by a net 18 percentage points in December. Seller optimism dropped to 50% from 59% while the “bad time to sell” share rose to 42% from 33%. Consumer attitudes for buying dropped by a net score of nine percentage points from November. The share of “good time to buy” slid to 52% from 57% as the negative share jumped to 39% from 35%.
About 39% of borrowers
“Both the ‘good time to sell’ and ‘good time to buy’ components fell significantly, with respondents overwhelmingly noting the unfavorability of economic conditions,” Doug Duncan, senior vice president and chief economist at Fannie Mae, said in a press release.
“In particular, the sell-side component fell for the first time since April and by 18 points, reversing most of the increases of the past three months and implying to us that, at least temporarily, potential home sellers might wait to list their homes. If so, this could have the effect of perpetuating already-tight inventory levels and supporting additional (albeit lesser) home price growth, which could contribute to a further moderating of home sales.”
Concerns over employment had an equal push and pull in December. Those not worried about losing their job decreased to 75% from 76% while those actively concerned inched up to 25% from 24%. The net share of households reporting a significantly higher income from the past 12 months fell to 20% from November’s 24%, with an 18% share reporting a significantly lower income.
