Homebuying Sentiment Sees Positive Growth at the End of 2022

Consumers are feeling more optimistic about the housing market as we entered the new year.

According to the Fannie Mae Home Purchase Sentiment Index in December, consumers feel more positively about homebuying conditions, future mortgage rates and job security. The index found that 21% of consumers said it was a good time to buy, up 7% from November. The percentage of consumers who said now is a bad time to buy a home dropped 3% to 76%.

While consumers are more optimistic about buying conditions, selling conditions didn’t fare as well. The percentage of consumers who said now is a good time to sell fell 3% to 51% and the percentage who said it is a bad time to sell rose 3% to 42%, compared to November. Home prices will remain the same, said 30%, while 37% said that home prices will decrease, down 3% from November.

Mortgage rates became a concern for both buyers and sellers in the second half of the year when mortgage rates hit 7%. Fourteen percent of respondents said mortgage rates will go down, up 4%, while 51% said they will go up, down 11%. Thirty-one percent said that mortgage rates will remain stable.

Consumers are feeling positive about job security though. More than 80% said they are not concerned about losing their job, up 4% from 78% in November. Only 17% said they are concerned, down 21% from November.

Additionally, most consumers said their household income is the same as it was a year ago. Nearly 60% reported no change, while 25% said it was higher and 15% said it was lower.

The home purchase sentiment index reached 61 points in December, up 3.7% from November, but still below pre-pandemic levels.