We’re still weeks away from July 4, but that hasn’t stopped American home values from shooting up like a Roman candle.
With prices soaring, you would think many home shoppers would be getting cold feet. Instead, 52% of people surveyed by mortgage giant Fannie Mae still think this is a good time to buy, up from 48% month over month.
Compare that to the feeling of home sellers: Just 32% of those folks think it’s a good time to sell.
Overall, the Fannie Mae Home Purchase Sentiment Index (HPSI) increased 4.5 points in May to 67.5, rising slightly after nearing its all-time survey low in April. Fannie Mae describes the homebuyer outlook as “somewhat more optimistic” in May than the previous month.
Why is optimism starting to rise again among homebuyers? Likely because they think mortgage rates are about to slide.
The net share of Americans who say mortgage rates will go down over the next 12 months has increased by 10 percentage points.
Still, even though optimism is rising, it is nowhere near where it was a year ago. The Fannie Mae Home Purchase Sentiment Index is down 24.5 points year over year.
In a press release, Doug Duncan, Fannie Mae senior vice president and chief economist, said:
“Although the HPSI’s precipitous declines of March and April did not continue in May, Americans’ financial, economic, and housing market concerns remain substantially elevated compared to survey history.”
Despite homebuyers increasingly seeing the glass as half-full, sellers remain down in the dumps. Duncan says sentiment in this group remains “severely dampened,” largely because of economic concerns.
Still, Duncan notes that an uptick in purchase activity could boost the confidence of some potential sellers. He says:
“As lockdown restrictions begin to ease across the country, we expect economic recovery to be largely shaped by consumers’ decisions regarding when and how to reengage in the economy. We believe this month’s HPSI results and Friday’s unexpectedly favorable labor market report to be encouraging signs for the months ahead.”