HousingWire

Only 28% say it’s good time to buy a home.

Home purchase sentiment dropped 3.9 points to 75.8 in July as concerns about high home prices continued to scare off prospective homebuyers.

Fannie Mae‘s Home Purchase Sentiment Index (HPSI) found that 66% of respondents said that due to high housing prices, it’s a bad time to buy a home, up from 64% last month. Only 28% said it was good time to buy a home, down from 32% in June.

Seventy-five percent said it’s a good time to sell, down from 77% last month. Twenty percent said it’s a bad time to sell, up from 15% in June.

Year over year, the sentiment index is up 1.6 points.

Doug Duncan, Fannie Mae senior vice president and chief economist, said homebuying groups appear to be “increasingly sensitive” to current high home prices.

“Two of the segments perhaps best positioned to purchase — consumers aged 35 to 44 and those with middle-to-higher income levels — have indicated even more pessimism than other groups,” Duncan said. “The percentage of respondents citing high home prices as the top reason for it being a ‘bad time to buy’ reached an all-time high.”

The percentage of respondents who say home prices will go up in the next 12 months decreased from 48% to 46%, while the percentage who say home prices will go down remained unchanged at 21%. The share who think home prices will stay the same increased from 25% to 27%. Likewise, the percentage of respondents who say mortgage rates will go down in the next 12 months decreased from 6% to 5%, while the percentage who expect mortgage rates to go up remained unchanged at 57%. The share who think mortgage rates will stay the same increased from 30% to 31%.

Freddie Mac‘s recent PMMS reported mortgage rates at 2.77% for the week ending August 5.

“With global market uncertainty surrounding the Delta variant of COVID-19, we saw 10-year Treasury yields drift lower and consequently mortgage rates followed suit,” said Sam Khater, Freddie Mac’s chief economist. “The 30-year fixed-rate mortgage dipped back to where it stood at the beginning of 2021, and the 15-year fixed remained at its historic low. This bodes well for those still looking to refinance, renovate or even purchase a new home.”

Employment wise, the percentage of respondents who say they are not concerned about losing their job in the next 12 months decreased from 88% to 84%, while the percentage who say they are concerned increased from 11% to 13%. And the percentage of respondents who say their household income is significantly higher than it was 12 months ago remained unchanged at 27%, while the percentage who say their household income is significantly lower increased from 13% to 14%.

The percentage who say their household income is about the same remained unchanged at 56%.