Consumers High on Overall Economy, Low on Housing

Consumer confidence in the housing market was at its lowest point for the year in October 2018, according to Fannie Mae’s latest Home Purchase Sentiment Index.

Five out of its six components in the index were down for the month, and the share of consumers who think now is a good time to buy a home had the greatest decline, down five percent to 21 percent overall, the second-lowest level in the survey's history, HousingWire reports. By contrast, confidence in housing hit a survey high in the 2018 spring buying season. Fewer consumers think now is a good time to sell their home as well, down three percent to 35 percent overall. 

Fannie Mae senior vice president and chief economist Doug Duncan says, “The contrast between the survey’s findings of weak homebuying sentiment and overall economic optimism mirrors what we’re seeing in the broader economy,” adding, "While economic growth posted the fastest back-to-back pace in four years in the third quarter, residential investment declined for the third consecutive quarter, a first for the current expansion.”

Americans also expect affordability to continue decreasing as those who expect home prices to rise increased two percentage points to 37 percent. The share of those who expect mortgage rates to go down fell one percentage point to -57 percent. There is also a slight increase in Americans worried about their job as those who are confident about not losing their job fell by one percentage point to 78 percent. Those who said their household income is significantly higher than it was 12 months ago remained unchanged at 19 percent.

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