“Home purchase sentiment gave back some of the gains accumulated over the prior two months that sent the index (Home Purchase Sentiment Index) to its survey high in February,’’ said Doug Duncan, SVP and Chief Economist at Fannie Mae. “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.
“In addition, the net share of consumers who expect mortgage rates to rise over the next year exceeded that experienced during the 2013 taper tantrum. However, the housing market could get some tailwinds from a seasonal rise in for-sale inventory, particularly as home 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.”
The Fannie Mae survey polls 1,000 households and simply asks how they feel about owning or renting a home, the economy, finances and other factors. All-in-all, the survey asks 100 questions designed to track shifts in attitude. The findings are compared to the same monthly survey going back to 2010.
Those who said it is a good time to sell increased by 9 percentage points to 31 percent. That is a survey high for two straight months.
High home prices were the most important reason for both the bad time to buy and good time to sell indicators, cited by 39 percent of consumers who say it is a bad time to buy (a survey high) and 24 percent of those who say it is a good time to sell. Americans who say that home prices will go up decreased by 1 percentage point in March to 44 percent. Those who foresee rising mortgage rates in the next year fell five percentage points, which is a survey low. Additionally, more Americans were concerned about losing their jobs and in the March Fannie Mae survey, fewer reported a rise in household income.
Conversely, Fannie Mae’s first quarter 2017 Mortgage Lender Sentiment Survey showed lenders, both big, small and in between, feel hopeful about the economy and believe the economy is moving in the right direction. This particular survey began in the first quarter of 2014 and those confidence levels are at their highest.