“Is now a good time to buy a house?” Or “Is now a good time to sell a house?” These are common questions that we receive throughout the year. Of course, the answer to these questions may vary not only by the location that you are in but also the time of year.
Of course, we can’t begin this discussion without addressing the biggest factor impacting the housing market right now – rising mortgage interest rates! When looking back at the housing market over the past few years, it is evident that the market likely peaked around February 2022. At that time, the Federal Reserve really started to take aggressive steps to tame inflation through what would lead to a series of interest rate hikes. Fast forward to later in 2022 and mortgage interest rates had more than doubled. This essentially priced out approximately 8 million would-be home buyers. Needless to say, this has led to a significant slowdown in home sales throughout the country. So what is the overall consumer sentiment on buying or selling a house right now? This was recently addressed by Fannie Mae with their Home Purchase Sentiment Index (HPSI).
Home Purchase Sentiment Index (HPSI)
Good news, bad news. The good news is that the Fannie Mae Home Purchase Sentiment Index (HPSI) increased by 0.6 points in November 2022 to 57.3. This is its first increase in nine months. The bad news is it remains just above the all-time low set in December 2022 and significantly lower than its level at this time last year. (It is 17.4 points lower as compared to the same time period last year.) As for some of the highlights of the HPSI, they are as follows:
- Good/Bad time to buy: 16% of respondents said it was a good time to buy; 79% of respondents said it was a bad time to buy (down from 80% in the prior month). Therefore the share of those that said it was a good time to buy rose by 1% over the prior month.
- Good/Bad time to sell: 54% of respondents said it was a good time to sell (up from 51% in the prior month); 39% of respondents said it was a bad time to sell (down from 42% in the prior month). As a result, the net share of those who say it is a good time to sell increased 6 percentage points month over month.
- Home price expectations: As for home prices rising in the next 12 months, 30% of respondents believed we would see price increases. This figure was unchanged from the prior month. The percentage of respondents that believed home prices would drop was 34%, which was lower than the 37% seen in the prior month. Meanwhile, 30% of respondents believed that home prices would remain unchanged. This figure was up from 26% in the prior month.
The Fannie Mae Home Purchase Sentiment Index (HPSI) also looked at other items such as mortgage rate expectations, job loss concern, and household income. To view the full report, click here. Overall, it appears that the sentiment seems to be mixed with a majority of Americans feeling that it is a better time to sell real estate as opposed to buy. As always, every market is unique. To gain a better understanding of your local housing market, it is always best to consult with a local and knowledgeable real estate agent.
Are you located in South Florida and looking to buy or sell real estate? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download the free Florida Home Search app for your smartphone or tablet as well. This best-in-class app will give you full access to the South Florida MLS data right on your mobile device.