With the 30-year in the 7% range and home prices continuing to rise, the typical home buyer is feeling quite miserable about the prospect of buying a home. Some 82% of consumers said that it was a “bad time to buy a home” in July, up from 78% in June, according to a survey released Monday by Fannie Mae
Fannie Mae releases the survey as part of its monthly Home Purchase Sentiment Index. The index rose in the latest July report, by 0.8 points to 66.8.
Consumers cite high home prices and unfavorable mortgage rates, said Doug Duncan, chief economist and senior vice president at Fannie Mae. “Further, the share of consumers expecting home prices to continue to rise has also been on a steady climb since March, which may only add to perceptions of unaffordability,” he added. Home prices may continue to stay elevated as few homeowners indicated their interest in selling in the survey, Duncan added. About 64% of respondents said it was a good time to sell a home, which was unchanged from the previous month. The “good time to sell” component has “not seen much movement” in recent months, he noted, “an indication that the current low levels of existing homes for sale will likely continue to persist in the near term.” So what’s going on? The 30-year fixed-rate mortgage rate could stabilize around 6% in the near term, but could go lower in a more optimistic scenario over the next couple of years, research suggests. Melissa Cohn, regional vice president at William Raveis Mortgage, told MarketWatch last month that her “ideal” mortgage rate would be 3% to 4%, but acknowledges that those rates were historic lows seen during the pandemic.