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Fannie Mae: Coronavirus concerns drop consumers' housing market sentiment
After falling 11.7 points last month, the Fannie Mae Home Purchasing Sentiment Index (HPSI) continued to drop an additional 17.8 points in April to 63 points – the lowest reading since November 2011.
Fannie Mae's Chief Economist Doug Duncan attributed the drop to “consumers’ deepening concerns about both their incomes and the housing market” and went on to suggest that the “much steeper decline in selling sentiment relative to buying sentiment will soften downward pressure on home prices.”
"Sellers are understandably reluctant to list homes right now. The lack of supply should provide support for prices," said Curt Long, NAFCU’s chief economist and vice president of research. “But elevated concerns over job loss and income declines are suppressing demand, and that is likely to last even after states begin to reopen.”
The fall in consumer sentiment was driven by respondents' pessimistic market perception. The net share of Americans who said now is a good time to buy a home decreased 18 percentage points in April, and the net share of Americans who said now is a good time to sell decreased 52 percentage points. However, low mortgage rates remain a driver of purchase optimism.
Also of note in the April data:
- the net share of respondents who said home prices will go up in the next 12 months decreased 28 percentage points;
- the net share of consumers who said mortgage rates will go down over the next 12 months increased 7 percentage points;
- the net share of consumers who said household income is significantly higher than it was 12 months ago decreased 17 percentage points; and
- the net share who said they are not concerned about losing their job decreased 1 percentage point.