Homebuyer Sentiment Falls to Lowest Level Since 2011 as Mortgage Rates Reach 7%

Prospective homebuyers are running out of options as rising interest rates, elevated home prices, and an uncertain economic outlook create a seemingly endless series of hurdles to homeownership. Fannie Mae’s Home Purchase Sentiment Index fell for the seventh straight month in a row in September to its lowest level since October 2011, MarketWatch reports.

Only 19% of survey respondents said now is a good time to buy a home, while six in ten consumers said now is instead a good time to sell. Those surveyed said that they expect interest rates to move even higher and home prices to fall within the next 12 months, and most would-be homebuyers are willing to wait for affordability to improve to make a housing market comeback.

“Consumers’ expectation that home prices will decrease matched a survey high, with a higher percentage of consumers believing home prices will decrease … over the next year,” Doug Duncan, senior vice president and chief economist at Fannie Mae, said in a statement.

That’s “a shift in survey sentiment that had previously only happened in 2011 and at the start of the pandemic in 2020,” he added.

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