Fannie Mae said it expects the housing market "will continue to cool" in the months ahead as its Home Purchase Sentiment Index® (HPSI) fell for the eighth consecutive month in October.
By decreasing 4.1 points to 56.7, it's at its lowest reading since the inception of the index in 2011.
Five of the six index components decreased month over month, including those associated with home buying and selling conditions.
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The most significant dynamic in the survey's reading was that only 16% of respondents indicated that now is a good time to buy a home – a new survey low – while the percentage who believe now is a good time to sell a home decreased sharply from 59% to 51% in October.
Persistently high home prices and unfavorable mortgage rates continue to fuel consumers' housing affordability concerns, Fannie Mae said.
Consumer Foresee Decreasing Home Prices
Doug Duncan, Fannie Mae Senior Vice President and Chief Economist, said in a prepared statement, "Consumers also remain concerned about the movement of home prices – expectations that prices will decrease reached a new survey high, particularly among homeowners – offering further support to our forecast of home price declines in 2023.
"As continued affordability constraints reduce homebuyer demand, and homeowners become reluctant to sell at potentially reduced prices, we expect home sales to slow even further in the coming months, consistent with our forecast."
Interestingly, job security sentiment got a boost in the survey, with the percentage of respondents who say they are not concerned about losing their job in the next 12 months increased from 78% to 85%, while the percentage who say they are concerned decreased from 21% to 15%.
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