Americans came down off their confidence high in March as fewer say now is a good time to buy a home, according to Fannie Mae’s Home Purchase Sentiment Index.
The index decreased 3.8 percentage points to 84.5 in March, down from February’s survey high.
“Home purchase sentiment gave back some of the gains accumulated over the prior two months that sent the index to its survey high in February,” said Doug Duncan, Fannie Mae senior vice president and chief economist. “Strong home price appreciation has turned into a double-edged sword for the housing market as it boosted the net share of consumers saying it’s a good time to sell to a record high, surpassing the plunging good time to buy indicator for the first time in the history of the survey.”
Five of the six components that comprise the HPSI decreased. The share of Americans who said now is a good time to buy fell 10 percentage points even as those who said now is a good time to sell increased nine percentage points.
Consumers were also less confident about the stability of their jobs as that share fell eight percentage points and those saying their income is significantly higher than last year fell eight percentage points.
The number of consumers who said mortgage interest rates will go down over the next 12 months dropped five percentage points to a new survey low while those so say home prices will go up decreased by one percentage points.
“The net share of consumers who expect mortgage rates to rise over the next year exceeded that experienced during the 2013 taper tantrum,” Duncan said. “However, the housing market could get some tailwinds from a seasonal rise in for-sale inventory, particularly as some sellers seek to lock in profits from recent rapid home price gains.”
“The market could also get a boost from homebuyers who decide to jump into the market before rates rise further,” he said.