The number of Americans saying now is a bad time to buy a home reached an all-time high in July, pulling down the overall Home Purchase Sentiment Index released by Fannie Mae.
The HPSI decreased by 1.5 percentage points in July to 86.8, falling from June’s all-time high. This drop was due to decreases in three of the six HPSI components.
The share of Americans who reported now is a good time to buy a home fell seven percentage points in July to 23%, a new survey low. At the same time, the share of those who say it’s a bad time to buy reached a new survey high.
And despite rising home prices, confidence in the seller market is also diminishing as those who said it is a good time to sell a home decreased 11 percentage points to 28%, falling from June’s survey high.
Among consumers who believe now is a bad time to sell, the share citing economic conditions as a primary reason posted a sharp increase. Nearly half of consumers who say now is a bad time to buy cited rising prices as a primary concern — a survey high.
“It’s clear that high home prices are a growing challenge helping to send buying sentiment to a record low,” said Doug Duncan, Fannie Mae senior vice president and chief economist. “However, we find the notable decline in selling sentiment surprising.”
“If it persists, this month’s decrease in optimism regarding the direction of the economy, which appears to coincide with rising uncertainty regarding the outlook for pro-growth legislation this year, could weigh on overall housing sentiment in the second half of the year,” Duncan said.
However, Americans were more confident in their jobs in July, with the share saying they are not concerned about their job rising nine percentage points to 75%. But while they are confident they won’t lose their jobs, Americans who reported their wages are up significantly from last year fell one percentage point to 16% in July.
The share of Americans who think home prices will continue to rise increased one percentage point this month to 47%.