Consumers are feeling optimistic about the housing market as the year progresses.
According to the Fannie Mae Home Purchase Sentiment Index®, as of March 2021, the index score jumped 5.2 points to 81.7, with consumers feeling particularly positive about buying, selling and household income.
For homebuyers, the number of people who think now is a good time to purchase a property rose from 48% to 53%, while the number of people who think now is a bad time to buy dropped from 43% to 40%. For sellers, the percentage of people who think now is a good time to sell increased 55% to 61%, while the percentage of people who think now is a bad time to sell dropped 35% to 28%.
Additionally, people have more household income, they reported. While most people (56%) said their income was roughly the same, 25% said their household income is significantly higher from 12 months ago, up from 18%, while only 15% said theirs is significantly lower, down from 19%. Most people aren’t concerned about losing their jobs either, according to 82%, compared to 17% who are.
However, consumers aren’t feeling optimistic that home prices will drop. The percentage of people who said they believe that housing prices will continue to rise over the next year grew from 47% to 50%, while the percentage of people who said they believe prices will go down dropped from 18% to 14%. Additionally, people are expecting mortgage rates to rise. Only 6% of respondents said mortgage rates will go down over the next year, down from 8%, while 54% said they will go up, an increase from 48%.
“Homeselling sentiment experienced positive momentum across most consumer segments – nearly reaching pre-pandemic levels and generally indicative of a strong seller’s market,” said Fannie Mae Senior Vice President and Chief Economist Doug Duncan. “Consumers once again cited high home prices and tight inventory as primary reasons why it’s a good time to sell. Alternatively, while the net ‘good time to buy’ component increased month over month, it has not recovered to pre-pandemic levels, as the homebuying experience continues to prove difficult for many of the same reasons, namely high prices and a lack of supply.”