Consumers Optimistic About Housing Market

Consumers are feeling more confident about both buying and selling as the year progresses.

According to the Fannie Mae June 2020 Home Purchase Sentiment Index®, 61% of respondents think now is a good time to buy, up from 52% the previous month, while those who say now is not a good time to buy decreased from 39% to 27%. Consumers who think now is a good time to sell increased to 41% from 32%, while those who say now is not a good time to sell dropped from 62% to 48%. This is in stark contrast to April 2020, when COVID-19 pushed consumer confidence to the lowest level since November 2011. Only 48% of consumers thought it was a good time to buy then, while a low 29% thought it was a good time to sell.

People are also feeling good about their jobs and income. Nearly three-quarters of people are not concerned about losing their job in the next 12 months, and 25% of people said their household income is higher than it was a year ago, up from 18% last month.

“A second month of improvement in June allowed the HPSI to regain some of the sharp losses in optimism observed in March and April,” said Senior Vice President and Chief Economist Doug Duncan. “The share of renters who say it’s a good time to buy a home is now at its highest level in five years, suggesting favorable conditions for first-time homebuying, consistent with the recent rebound in home purchase activity. Homeowners seem to have taken note of the resulting lack of housing supply, with an increased share saying it’s a good time to sell a home. However, this activity may cool again in the coming months, depending on the extent to which it can be attributed to consumers having chosen to delay or accelerate homebuying plans due to the pandemic. Survey respondents’ persistent, substantially elevated concerns about job security in the face of record unemployment remains a key takeaway, particularly among renters and homeowners with mortgages. We believe the continuing uncertainty regarding the coronavirus’ containment suggests an uneven and potentially volatile course toward economic recovery.”

However, it’s not all positive. The percentage of people who think home prices will rise over the next 12 months increased from 26% to 34%, while those who think prices will decrease over the same time period dropped from 35% to 25%. As mortgage rates continue to drop, consumers do believe the end is in sight. Only 17% believe mortgage rates will go down in the next 12 months, a drop from 25% in May.