Business & Investment

Home buyers are the most pessimistic in 10 years

Potential homebuyers review documents at an open house in Columbus, Ohio.

Tai Wright | Bloomberg | Getty Images

It’s hard to be a home buyer today. The supply of homes for sale is record low, homebuilders are slow to step up, and prices are rising at the fastest pace in almost 20 years.

It’s no wonder that homebuyers’ sentiment has fallen to the lowest level in Fannie Mae’s 10-year history. Home Purchase Emotion Index (HPSI)..

The percentage of people who said it was a good time to buy a house decreased from 53% to 47%, and the percentage of people who said it was a bad time to buy a house increased from 40% to 48%.

According to Fannie Mae’s Senior Vice President and Chief Economist, Doug Duncan, survey respondents cite high prices and supply shortages as the main reasons for pessimism.

“The decline in home buying motivation may indicate that some consumers, who may be overwhelmed with savings, may be partially boosted by stimulus payments,” Duncan said. Highly sexual.

Consumers with incomes between $ 50,000 and $ 100,000 were particularly pessimistic. This is because the shortage of homes for sale is the most serious at the bottom of the market, making it increasingly difficult to find affordable homes. (The median household income in the United States was close to $ 69,000 in 2019.)

The competition for housing doesn’t seem to give up at all. In fact, competition has reached record levels.

According to real estate agent Redfin, it took an average of 19 days to sell a home in the four weeks leading up to May 2. This is the fastest since we started tracking that indicator in 2012. It has decreased from an average of 35 days in the same period a year ago. Approximately 45% of homes for sale signed a contract within a week.

Another record shows that 48% of homes sold above list price, an increase of 20 points over the same period last year.

House prices have risen more than 11% from a year ago due to fierce competition and a bidding war. Low mortgage rates are no longer very useful as they helped fuel those high prices. As the cost of builders is soaring, so is the price of new construction.

Darryl Fairweather, Redfin’s Chief Economist, said: “Rising timber prices have led to higher prices for new homes and indirectly higher prices for existing homes.”

Fairweather also said prices could rise in other sectors, from food to gasoline, as the state lifts pandemic restrictions. It may cut homebuyers’ budgets and ease home competition.

“A more balanced market may encourage more moving homeowners to eventually sell, because they are less afraid to find and compete with the homes they buy.” She added.

Home buyers are the most pessimistic in 10 years Home buyers are the most pessimistic in 10 years

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