The net share of respondents who believed it is a good time to buy a home grew eight percentage points to 22%. Meanwhile, home-selling sentiment plummeted from 16% to 59% as the share of those who think it’s a bad time to sell increased from 27% to 35% in August.
“Accompanying this, HPSI respondents reported a significant decrease in home-selling sentiment,” said Fannie Mae chief economist Doug Duncan. “We also observed a large decline in consumers reporting high home prices as the primary reason for it being a good time to sell a home, suggesting that expectations of slowing or declining home prices have begun to negatively affect selling sentiment.”
The net share of consumers anticipating home prices to go up in the next 12 months fell 9% month over month to 33%. As for mortgage rates, the net share of consumers expecting rates to go down over the next year rebounded to 11%.
“Conversely, lower home prices would obviously be welcome news for potential first-time homebuyers, who are likely feeling the combined affordability constraints of the high home price and high mortgage rate environment,” Duncan said. “In fact, the survey’s ‘ease of getting a mortgage’ component dropped to an all-time low among this typically younger demographic (i.e., 18- to 34-year-olds).
“With home prices expected to moderate over the forecast horizon and economic uncertainty heightened, both homebuyers and home-sellers may be incentivized to remain on the sidelines – homebuyers anticipating home price declines and potential home-sellers not keen to give up their lower, fixed mortgage rate – contributing to a further cooling in home sales through the end of the year.”