Market Data + Trends

Homebuyer Sentiment Falls to Lowest Level Since 2011 as Mortgage Rates Reach 7%

Homebuyers have faced a number of obstacles on the path to homeownership since the start of the pandemic, and as mortgage rates continue to reach new highs, market sentiment is falling
Oct. 10, 2022

Prospective homebuyers are running out of options as rising interest rates, elevated home prices, and an uncertain economic outlook create a seemingly endless series of hurdles to homeownership. Fannie Mae’s Home Purchase Sentiment Index fell for the seventh straight month in a row in September to its lowest level since October 2011, MarketWatch reports.

Only 19% of survey respondents said now is a good time to buy a home, while six in ten consumers said now is instead a good time to sell. Those surveyed said that they expect interest rates to move even higher and home prices to fall within the next 12 months, and most would-be homebuyers are willing to wait for affordability to improve to make a housing market comeback.

“Consumers’ expectation that home prices will decrease matched a survey high, with a higher percentage of consumers believing home prices will decrease … over the next year,” Doug Duncan, senior vice president and chief economist at Fannie Mae, said in a statement.

That’s “a shift in survey sentiment that had previously only happened in 2011 and at the start of the pandemic in 2020,” he added.

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