For-sale inventory may soon get even tighter. A new poll from Fannie Mae shows a large drop in the number of consumers who think now is a good time to sell a home. Fannie Mae’s Home Purchase Sentiment Index, a survey of 1,000 Americans, saw an 8 percent drop in March on home-selling prospects. What’s more, four of the six HPSI components showed a drop in March as the survey revealed a more negative consumer outlook on the economy.
The negative outlook seems at odds with the latest Bureau of Labor Statistics employment report, which showed strong job creation and an expansion in employment. Nevertheless, Fannie Mae’s index showed confidence waning about employment with a 7 percent drop in the share of Americans who said they were worried about keeping their job (receding from an all-time survey high just set in February). Also, household income dropped 4 percentage points as a fewer number of consumers reported that their income is significantly higher than it was 12 months ago.
“Growing pessimism over the last three months about the direction of the economy seems to be spilling over into home-purchase sentiment,” says Doug Duncan, senior vice president and chief economist at Fannie Mae. “The gap between the share of consumers who think the economy is on the wrong track and the share who think it is on the right track has widened, nearly matching its reading last August, when concerns regarding China and oil prices led to the biggest stock market plunge in years. In turn, we saw dips this month in income-growth perceptions, attitudes about the home-selling climate, and job confidence—all of which contributed to the lowest HPSI reading in the last year and a half.”
Fannie’s HPSI also revealed less optimism about buying a home. The share of respondents who say that it’s a good time to purchase a home dropped 2 percentage points to 33 percent.
More respondents do believe that home prices will rise this year. Bullish respondents rose 1 percentage point to 34 percent in March, which reverses a downward trend in price expectations over the last few months.
Source: Fannie Mae