A measure of US sentiment towards the housing market deteriorated for the second consecutive month in December, amid growing concerns about the pandemic.
The poll was conducted before Wednesday’s events in Washington, DC, when a crowd broke into the Capitol.
The Home Purchase Sentiment Index from Fannie Mae FNMA,
Dropped six points between November and December as consumers became much more pessimistic about buying and selling homes, the mortgage giant reported Thursday. The index, which is based on a survey of more than 1,000 rural household financial decision-makers, is now at its lowest level since May last year.
The percentage of Americans who think now is a good time to buy a home is down 5 percentage points to just 52%, while the percentage of people who think it’s a bad time to buy is down 4 percentage points increased to 39%. In December 2019, nearly two-thirds of Americans thought this was a good time to buy real estate.
Meanwhile, it appears that sellers will remain on the sidelines of the market. Only half of the respondents said they thought this was a good time to sell a house, compared to 59% the month before.
It’s the first time this measure has dropped since April, and the drop has been big enough to reverse gains made in recent months.
The change implies “that potential home sellers could wait, at least temporarily, to list their homes,” Doug Duncan, Fannie Mae’s chief economist, said in the report.
“If so, it could have the effect of maintaining already tight inventory levels and supporting additional (albeit lesser) house price increases, which could contribute to further moderation in home sales,” added Duncan adds.
A separate report on Thursday from Realtor.com found that the number of homes for sale had fallen below 700,000 for the first time since the company began tracking this data.
The shortage of rural owner-occupied homes has made it much more difficult to find a home for sale, making it difficult for buyers to take advantage of record low mortgage interest rates.
Fannie Mae’s report also pointed to a mixed view of the state of the economy as coronavirus cases have soared to record levels in recent weeks. The percentage of people who said they were not worried about losing their job fell slightly, but remained high at 75%. However, only 20% of respondents said their family income is significantly higher than a year ago, compared to 24% the month before.