Mortgage rates are double what they were one year ago, but falling home prices are boosting consumer confidence in a slowing housing market. In Fannie Mae’s December monthly housing sentiment index, the share of respondents who say now is a good time to buy a home remained at a low 21%, but was up from 16% in October, CNBC reports.
On the contrary, falling home prices are discouraging would-be sellers who are losing negotiating power in a less competitive market. The share of respondents saying now is a good time to sell fell from 54% to 51% from November to December, while the share saying now is a bad time to sell increased during the same period.
More consumers now believe home prices will fall in the next 12 months, and more also said they believe mortgage rates will come down.
Prices in November, the most recent measurement, were 2.5% lower than the spring 2022 peak, according to CoreLogic. They were still over 8% higher year over year, but that annual comparison is now half of what it was in June.
Advertisement
Related Stories
Affordability
NAHB Announces Plan to Address the Housing Affordability Crisis
The National Association of Home Builders has outlined a 10-step plan that would increase the supply of single-family and multifamily for-sale and for-rent housing
Market Data + Trends
Vacation and Investment Home Market Insights
A recent report finds beach homes to be the most sought-after vacation-home type and that the investment potential of a second home is an important factor in the purchasing decision
Affordability
How Much Income Do First-Time Buyers Need to Afford the Average Home?
The median-priced home is unaffordable in 44 of the 50 largest U.S. metro areas