Higher home prices are a likely culprit for part of the 1.5 percentage point dip in Fannie Mae's Home Purchase Sentiment Index in July. Buyers may be losing confidence in their ability to purchase a home as the national median home price surged to $263,800 in June, a record high.
But the decline in selling sentiment was actually the biggest drag on the index in July. The net share of 1,000 consumers surveyed who say now is a good time to sell a home dropped by 11 percentage points. For the consumers who said they believed it was a bad time to sell, the share citing economic conditions as the primary reason posted a significant uptick. The drop does follow June’s survey record high, but Fannie Mae had trouble explaining the significant change.
“It’s clear that high home prices are a growing challenge helping to send buying sentiment to a record low,” says Doug Duncan, senior vice president and chief economist at Fannie Mae. “However, we find the notable decline in selling sentiment surprising. If it persists, this month’s decrease in optimism regarding the direction of the economy, which appears to coincide with rising uncertainty regarding the outlook for pro-growth legislation this year, could weigh on overall housing sentiment in the second half of the year.”
The net share of consumers who say now is a good time to buy a home dropped 7 percentage points in July. Nearly half of consumers who say now is a bad time to buy cited rising prices as their primary concern, which also marks a new survey high.
Here’s a closer look at findings from Fannie Mae’s Home Purchase Sentiment Index:
- 23%: The net share of Americans who say now is a good time to buy a home. This marks a 7 percentage point drop from June and a new survey low.
- 28%: The net percentage of those who say it is a good time to sell. The share fell by 11 percentage points, reaching a survey high in July.
- 47%: The net share of Americans who say that home prices will go up. The share rose by 1 percentage point in July.
- 75%: The net share of Americans who say they are not concerned about losing their job. This increased 9 percentage points in July and reversed a decreasing trend from last month.
Source: Fannie Mae
