The Fannie Mae Home Purchase Sentiment Index decreased slightly as consumers express diverging opinions on home buying and selling in May.
The sentiment index decreased 0.5 percentage points from April to 86.2 in May. This decrease is due to a drop in three of the six HPI components, which outweighed the increases in the other three components.
The share of Americans who said now is a good time to buy a home dropped to a record low of 27% after falling eight percentage points in May. And the share of those who reported now is a good time to sell reached a record high, increasing six percentage points to 32%.
This is the second time in the survey’s history that the net share of those saying it’s a good time to sell surpassed those saying it’s a good time to buy.
“High home prices have led many consumers to give us the first clear indication we’ve seen in the National Housing Survey’s seven-year history that they think it’s now a seller’s market,” said Doug Duncan, Fannie Mae senior vice president and chief economist.
“However, we continue to see a lack of housing supply as many potential sellers are unwilling or unable to put their homes on the market, perhaps due in part to concerns over finding an affordable replacement home,” Duncan said. “Prospective homebuyers are likely to face continued home price increases as long as housing supply remains tight.”
Americans expressed greater belief that mortgage rates will drop over the next 12 months as that component increased five percentage points. The share of consumers who think home prices will increase dropped five percentage points this month to 40%.