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Consumer Confidence in Housing at Decade-Low Level

Real Estate

Residential Neighborhood | Image by Shutterstock

Consumer sentiment reached its lowest level since 2011 due to increased pessimism from both homebuyers and home sellers, according to July’s National Housing Survey.

Fannie Mae’s Home Purchase Sentiment Index (HPSI) shows few consumers believe home prices will rise in the near term compared to the 30% of those who believe they will fall. This pessimism has led to a sharp decline in consumer confidence since the start of the year.

The six components that comprise Fannie Mae’s HPSI include buying conditions, selling conditions, home price outlook, mortgage rate outlook, job loss concern, and change in household income.

The HPSI decreased by 2.0 points in July and is down 13 points since this time last year. The overall index is 62.8 for the month.

In July, only 17% of respondents reported now is a good time to buy a home, down from 20% in June, according to the survey. Meanwhile, 67% of respondents believe now is a good time to list a home, down from 76% in May.

In an exclusive interview with The Dallas Express, Shana Acquisto, co-owner of Acquisto Real Estate and incoming president of Collin County Association of Realtors, discussed how her firm interprets the current housing sentiment and climate.

“I believe negative media sentiment around housing is pervasive right now, but it is important to understand the data and factual information,” said Acquisto. “Buyers are indeed a bit nervous, and sellers are a little too unrealistic, but this is all part of the housing market beginning to stabilize.”

When it comes to housing, each market is drastically different from the next. Even so, Acquisto says her firm has its finger on the pulse, believing it could take anywhere from 18-24 months before normal confidence levels return to the housing market.

Doug Duncan, Fannie Mae’s senior vice president and chief economist, reported that unfavorable mortgage rates are the top reason buyers and sellers are avoiding the current housing market. The survey found only 6% of respondents think mortgage rates will decrease, while 67% said they expect rates to increase further.

The consumer’s reaction to current housing conditions is increasingly mixed, according to Duncan. “Some homeowners may opt to list their homes sooner to take advantage of perceived high prices,” he said. “while some potential homebuyers may choose to postpone their purchase decision believing that home prices may drop.”

As a real estate expert, Acquisto says her duty is to help educate and advocate for her local community.

Acquisto told The Dallas Express she is confident interest rates will come back down. In the meantime, she recommends interested homebuyers start doing their research. She advises, “Hire a professional [who] will sit down and help you navigate the market. Someone who can educate you and show you the local housing statistics in your area.”

“That one step alone can make all the difference for first-time home buyers,” she said.

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