“Affordability concerns remain the primary driver of consumer housing sentiment, even as the topline findings from our monthly survey showed a modest uptick in optimism on both homebuying and home-selling conditions,” Mark Palim, Fannie Mae deputy chief economist, said in the report.
The survey also indicated that more consumers expect both home prices and mortgage rates to increase over the next 12 months. This expectation could further compound affordability concerns for potential buyers.
On the selling side, sentiment improved slightly, with 66% of respondents indicating it’s a good time to sell, up from 64% in May. This suggests a continued perception of a strong seller’s market, likely driven by limited housing supply.
Palim noted that any significant improvement in overall sentiment would likely require progress on affordability, either through lower mortgage rates or improved housing supply.
“If mortgage rates decline through the end of the year, as we currently forecast, we do think home sales activity will pick up, but progress on that front is likely to be slow due to the ongoing imbalance between supply and demand,” he said.
Source: mpamag.com