These are not happy times for home buyers. While home sellers are over the moon with rising prices and increased competition among buyers for their properties, the same can’t be said for buyers, who’ve never had it so tough, according to a new survey from Fannie Mae.
The latest Fannie Mae Home Purchase Sentiment Index reveals that the number of home buyers who think now is a good time to buy has slumped to an all-time low, while the amount of home owners who believe now is a good time to sell hit new heights.
One reason for the disconnect is that there’s a limited number of properties for sale in many markets, which means sellers face less competition and can ask for a higher price. But for buyers, it means they’re left with fewer choices, and they have to pay higher prices, and often face bidding wars.
“We can partially attribute the sizable gain in April in home selling optimism both to a correction for last month’s unexpected dip and to typical seasonal strength in housing activity in the spring and summer,” said Doug Duncan, senior vice president and chief economist at Fannie Mae, in a statement. “Even after accounting for these factors, continued tight housing supply has led to renewed strength in home price appreciation, making selling a home a more attractive prospect this year in particular. This improved sentiment could provide an extra boost of much-needed supply for the spring selling season.”
Fannie Mae’s latest Home Purchase Sentiment Index found that some 30 percent of Americans believe now is a good time to buy a home, which is 3 percent less than one month ago and an all-time low. That contrasts with the 15 percent of Americans who believe now is a good time to sell a home, another all-time high.
The bad news is that consumers aren’t optimistic of an improvement any time soon. More consumers believe home prices will rise in the next 12 months compared to one month ago, while slightly less say they expect mortgage rates to increase in the next year.