Americans Are Losing Confidence in the Housing Market as COVID-19 Pandemic Rages On

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A measure of Americans’ sentiment toward the housing market worsened for the second consecutive month in December, reflecting rising concerns related to the pandemic.

The survey was taken before Wednesday’s events in Washington, D.C. when a mob broke into the Capitol building.

The Home Purchase Sentiment Index from Fannie Mae dropped six points between November and December, as consumers became far more pessimistic about buying and selling homes, the mortgage giant reported on Thursday. The index, which is based on a survey of more than 1,000 “household financial decision makers” nationwide, now sits at the lowest level since May of last year.

The percentage of Americans who believe now is a good time to buy a home fell by five percentage points to just 52%, while the percentage of people who think it’s a bad time to buy rose four percentage points to 39%. In December 2019, nearly two-thirds of Americans believed it was a good time to purchase property.

Meanwhile, it seems as if sellers are going to continue remaining on the sidelines of the market. Only half of the survey respondents said they felt now is a good time to sell a home, down from 59% the month prior.

It’s the first time this measure has fallen since April, and the decline was large enough to erase the gains made in recent months.

The change implies “that, at least temporarily, potential home sellers might wait to list their homes,” Doug Duncan, Fannie Mae’s chief economist, said in the report.

“If so, this could have the effect of perpetuating already-tight inventory levels and supporting additional (albeit lesser) home price growth, which could contribute to a further moderating of home sales,” Duncan added.

A separate report on Thursday from Realtor.com found that the number of homes for sale had dropped below 700,000 for the first time since the company began tracking this data.

The shortage of homes for sale nationwide has made it much more difficult to find a home to purchase, meaning that buyers are struggling to take advantage of the record-low mortgage rates on offer.

Fannie Mae’s report also pointed to a mixed view on the state of the economy, as coronavirus cases have risen to record levels in recent weeks. The percentage of people who said they were not concerned about losing their job decreased slightly, but remained high at 75%. However, only 20% of respondents said their household income is significantly higher than it was a year ago, down from 24% the month prior.

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source https://www.realtor.com/news/trends/americans-losing-confidence-in-housing-market-as-covid-19-rages-on/