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.
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