Fannie Mae Predicts a Softer Housing Market
A softer market, slower housing market in 2022; Fannie Mae’s Predictions.
According to Globe St, consumers continued to report substantially divergent views of homebuying and home-selling conditions when asked if it is a good time or a bad time to buy or sell a house.
The Fannie Mae Home Purchase Sentiment Index (HPSI) reflected that and more in December, as it decreased 0.5 points to 74.2. The percentage of respondents who say it is a good time to buy a home decreased from 29% to 26%, while the percentage who say it is a bad time to buy increased from 64% to 66%. As a result, the net share of those who say it is a good time to buy decreased 5 percentage points month over month.
The percentage of respondents who say it is a good time to sell a home increased from 74% to 76%, while the percentage who say it’s a bad time to sell decreased from 21% to 17%. As a result, the net share of those who say it is a good time to sell increased 6 percentage points month-over-month.
Overall, three of the index’s six components decreased month over month. In December, 76% of respondents reported that it’s a good time to sell a home, compared to the survey record-low 26% of consumers who reported that it’s a good time to buy.
By comparison, in December 2020, 50% of respondents believed it was a good time to sell, while 52% believed it was a good time to buy. Year over year, the full index is up 0.2 points.
Fannie Mae Chief Economist Doug Duncan also noted that the housing market may begin to soften in the coming year as the index has drifted slightly downward since March 2021.
“Over the past year, low mortgage rates plus government stimulus programs helped increase mortgage demand, but the bidding-up of homes increased prices to record levels, making affordability a greater constraint for both first-time and move-up homebuyers,” he said in prepared remarks. “Among homeowners, the ‘good time to buy’ sentiment fell 30 percentage points over the past year to its current level of 30%; for renters it fell from 37% to 21%. Even though demand remains strong, a majority of consumers clearly have reservations about purchasing a home at current prices.”
https://www.globest.com/2022/01/10/fannie-mae-predicts-housing-market-will-soften-this-year/
