More than eight in 10 Americans think it’s a bad time to buy a home, according to a new survey from the Federal National Mortgage Association (Fannie Mae).
Fannie Mae surveyed over 1,000 household financial decision makers in the U.S. and found that 84% say it’s a bad time to buy. That’s up from 82% in August and 75% last September.
“Mortgage rates persistently over 7% appear to be deepening the malaise consumers feel about the home purchase market,” Fannie Mae Chief Economist Doug Duncan said in a press release. “In fact, high mortgage rates surpassed high home prices as the top reason why consumers think it’s a bad time to buy a home, a survey first.”
Meanwhile, 63% of respondents said now is a good time to sell, down from 66% in August.
“On the sell side, respondents also listed unfavorable mortgage rates as the top reason why they believe it’s a bad time to sell a home,” Duncan said. “This indicates to us that many homeowners are probably not eager to give up their ‘locked-in’ lower mortgage rates anytime soon, but it also may reflect the worry of some homeowners that sale values may be suppressed slightly if the pool of qualified homebuyers is constrained by elevated mortgage rates.”
Seventeen percent of households surveyed in September thought mortgage rates would fall in the next 12 months. But mortgage rates recently hit a 2023 high, reaching 7.63% on Oct. 6. Sixty percent of respondents said they felt it would be difficult for them to get a home mortgage today.
Less than one in four respondents — 23% — thought home prices would drop in the next 12 months.
However, Fannie Mae economists predict that home sales will decrease by 17% throughout 2023 and bounce back by less than 1% in 2024.