How low can it go? Well, lower than ever apparently when it comes to consumers who think it’s a good time to a home. The total fell 1 point to a record low of 25 percent in January while 70 percent said the time was not right, a 4 point increase. This brought the net of positive responses down to -45 percent, 60 percentage points below its level a year earlier and an all-time low. Those opinions, along with answers to three other questions in the National Housing Survey knocked Fannie Mae’s Home Purchase Sentiment Index (HPSI) down 2.4 points from its December reading to 71.8, and 5.9 points below its reading in January 2021. “Consumer sentiment toward housing softened further in January – the HPSI fell 2.4 points to 71.8 – as affordability and supply constraints continue to limit home purchase opportunities, particularly among younger households,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “Younger consumers – more so than other groups – expect home prices to rise even further, and they also reported a greater sense of macroeconomic pessimism. “Additionally, while the younger respondents are typically the most optimistic about their future finances, this month their sense of optimism around their personal financial situation declined . All of this points back to the current lack of affordable housing stock, as younger generations appear to be feeling it particularly acutely and, absent an uptick in supply, may have their homeownership aspirations delayed. On the whole, the latest HPSI results are consistent with our forecast of slowing housing activity in the coming year.”
Source: Mortgage News Daily
