While Americans, in general, feel pretty good about their household incomes and job security, the red-hot housing market caused a dramatic plunge in their attitudes about buying a new place now.
That's according to the monthly National Housing Survey released on June 7 by Fannie Mae. The survey contains six components that the GSE's research team bundles into a Home Purchase Sentiment Index (HPSI), which this time around recorded the lowest sentiment in the survey's 11-year history as to whether it's "a good time to buy."
Only 35% of the respondents felt that way when the survey was conducted in May, a drop of 18 percentage points from March, when 53% felt that way, Fannie Mae said in its report.
'Acutely aware' of higher home prices and low inventory
"Consumers appear to be acutely aware of higher home prices and the low supply of homes, the two reasons cited most frequently for that particular sentiment," Doug Duncan, Fannie Mae's senior vice president and chief economist, said in a news release.
Meanwhile, four of the HPSI's six components rose month over month, reflecting "a much greater sense of job security and improved household income compared to the same time last year," the Fannie Mae report said.
Plus, Duncan said, continuing low mortgage rates and stimulus-fed high savings rates (which can help build a down payment) may be driving what appears to be a growing intent to purchase on their next move "despite the challenging buying conditions."
The Millionacres bottom line
That swift, dramatic drop in the number of people feeling positive parallels record surges in home prices and reflects what might be a healthy recognition among many buyers that now is not the time to jump in. And with so little inventory and so much demand still the dominant factors in play, that makes sense.
Two-thirds of the respondents, meanwhile, say now is a good time to sell. That makes sense, too. But there may be no need to hurry. About half of the respondents expect home prices to go up in the next 12 months, while only 17% think prices will decrease. (About half expect mortgage rates to go up, too.)
So, how will all this play out for real estate investors in the months ahead? We'll find out.