Consumers have more confidence in the job market than they do on housing, and home prices could be the culprit, according to Fannie Mae.
While job confidence leaped 10 percentage points in February to a new high, confidence in home selling and buying dropped 6 and 7 percentage points, respectively, from a year ago, according to Fannie’s Home Purchase Sentiment Index.
The net share of consumers claiming it’s a good time to buy a home was 15% in February, while those claiming it’s a good time to sell declined to 30%. At the same time, the share of Americans not concerned about losing their jobs peaked at 81%.
Slumping sentiments on housing can be attributed to changes in property values, which have remained a top consumer concern.
“Notably, home price growth expectations have trended significantly downward, with the net share of consumers expecting home prices to rise falling 19 percentage points from its survey high established at the start of 2018,” Doug Duncan, Fannie Mae’s senior vice president and chief economist, said in a press release.
“While declining home price expectations may point to improving affordability, the share of consumers who think it’s a bad time to buy has grown over the last year, and high home prices remain the most frequently cited concern. It is plausible that consumers believe that price gains could decelerate further, making it worthwhile to wait rather than act now,” he said.
The net share of surveyors believing house values will rise increased 3 percentage points month-over-month, but dropped 12 percentage points to 33% on an annual basis.
Consumers expressed similar sentiments on mortgage rates, as the net share expecting them to rise over the next 12 months inched up a percentage point from January to February, but fell 5 percentage points from a year ago.