Consumer confidence in the housing market hit its lowest level of 2018 in October, according to the latest survey data by Fannie Mae. Buyer confidence dropped five percent, the second-lowest level in the survey's history.
By contrast, consumer confidence in housing was surging in spring 2018. The rise of interest rates seems to have put a damper on confidence. However, confidence in the economy being on the right track continues to gain, and reached a new high in October, CNBC reports. "The contrast between the survey's findings of weak homebuying sentiment and overall economic optimism mirrors what we're seeing in the broader economy," says Doug Duncan, senior vice president and chief economist at Fannie Mae. "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."
Fewer consumers now expect home prices to rise, echoing other surveys that have shown a drop in the number of people who think owning a home is currently a good investment. Home prices are still gaining, but those increases have been shrinking each month: They've fallen below 6 percent annually for the first time in a year, according to the much-watched S&P CoreLogic Case-Shiller home price index.