Buyers of homes and even some sellers haven’t been this dissatisfied in many, many years.
According to a report by Bloomberg, which cited statistics from the Federal National Mortgage Association, consumers’ attitudes toward the housing market have become more gloomy than at any other point since 2011, when home prices hit rock bottom in the midst of the global financial crisis.
The Home Purchase Sentiment Index published by Fannie Mae reached its lowest level in more than a decade as a result of consumers’ pessimistic expressions over the prospects of purchasing a home. The index, which measures consumers’ perspectives on the state of the housing market, has decreased from 76 to 63 over the course of the past year.
Since the Great Recession, the consumer housing outlook hasn’t been as bleak as it was during that time period. During that time, home values fell as borrowers struggled to make payments, which put millions of people in danger of losing their homes.
There is currently a crisis in terms of the availability of affordable housing.
Rates on 30-year fixed-rate mortgages have almost doubled year-over-year, reaching 5.43 percent in late July, up from 2.97 percent a year earlier. This increase is a direct result of the Federal Reserve raising benchmark borrowing costs.
Because of this, home ownership has become unattainable for a greater number of customers. In June, new house sales in the United States reached their lowest level in more than two years.
Doug Duncan, senior vice president of Fannie Mae and chief economist, said in a statement that “the HPSI has decreased gradually for much of the year, as rising mortgage rates continue to take a toll on housing affordability. Unfavorable mortgage rates have been increasingly mentioned by customers as a major cause for the growing opinion that it is a terrible time to buy as well as sell a home,” says an article from the Wall Street Journal. “The perception that it is a bad time to buy as well as sell a home is expanding.”
Fannie Mae reported that four of the index’s six components showed a decrease from one month to the next. These included views on buying and selling circumstances, the forecast for home prices, and fears regarding job loss.
Consumers were most concerned about the conditions for making purchases, as this mood shifted the most from year to year, with 76 percent of respondents stating that it is not a good time to make purchases.
Consumers believe that the upward trend in housing prices has reached its conclusion, despite the fact that this phenomenon has been the story of the year. The percentage of respondents who predict that home prices would increase over the next year dropped from 44 percent in June to 39 percent in July, while the percentage of respondents who indicated home prices will go down jumped from 27 percent to 30 percent.
