Despite the challenges, Americans would still rather buy than rent

The proportion of consumers who say they would buy a home if they moved reaches an all-time high of 72 percent, according to the Fannie Mae National Housing Survey.

Most Americans think it’s a bad time to buy a home, but nearly three out of four say they’d rather buy than rent the next time they move.

Those are the latest findings from an in-depth monthly survey of consumer attitudes about housing markets and the economy by mortgage giant Fannie Mae.

Latest from Fannie Mae National Housing Survey found that Americans are increasingly confident in their finances and job security, and that a record 72 percent would buy a home if they moved.

But many of those prospective home buyers have seen the headlines about rising house prices Y listing shortage in many markets, and the majority (56 percent) believe it is a bad time to buy.

Doug Duncan | Photo credit: Fannie Mae

Consumers “seem to be very aware of higher home prices and low supply of homes,” as those are the two reasons most often cited by those who say it’s not a good time to buy, the economist said. Fannie Mae boss Doug Duncan in a statement.

“However, despite difficult purchasing conditions, consumers appear to be more intent on buying on their next move, a preference that may be supported by the expectation of continued low mortgage rates, as well as the high savings rate. During the pandemic, it may have allowed many to pay an advance. “

Source: Fannie Mae National Housing Survey.

Among the roughly 1,000 homeowners and renters Fannie Mae surveyed in May, only 35 percent thought it was a good time to buy a home, up from 47 percent in April.

With 56 percent saying it’s a bad time to buy, the net share of those who say it’s a good time to buy plummeted 20 percentage points. That’s the biggest month-over-month decline in homebuyer sentiment in survey records dating back to 2010, representing a “net good time” to buy stocks at a record low of -21 percent.

Source: Fannie Mae National Housing Survey.

The good news for consumers and real estate brokers and agents is that the majority of respondents think it is a good time to be a seller, which could help generate more listings on the market in the coming months.

Although the proportion of respondents who said it was a good time to sell remained constant from April to May, at 67 percent, the percentage of those who said it was a bad time to sell dropped by one percentage point, to 25 percent. So the net share of those who think it’s a good time to sell also increased by one percentage point, to 42 percent, roughly where it was before the pandemic.

Source: Fannie Mae National Housing Survey.

With the pandemic continuing to wane in the US, Americans with jobs are less eager to lose them, giving prospective home buyers more confidence to commit to a 30-year mortgage.

With 87 percent of employed workers saying they are not worried about losing their jobs in the next 12 months, the net share of those who are not worried rose 11 percentage points in May to 75 percent.

Source: Fannie Mae National Housing Survey.

Increasing household income is another factor that can drive demand from home buyers. With 29 percent of Americans saying their household income is “significantly higher” than 12 months ago, and only 13 percent saying it was significantly lower, the “significantly higher net” proportion increased 12 percentage points from April to May.

Source: Fannie Mae National Housing Survey.

With interest rates still near record lowsand many households save money for low pay, the proportion of consumers who said they would buy a home increased 3 percentage points in May to a record high of 72 percent. At the same time, the share that said it would rent fell 5 percentage points to 23 percent, a new survey low.

Source: Fannie Mae National Housing Survey.

While Americans are clearly eager to be homeowners, there is a little less urgency that rising prices and mortgage rates put that goal out of reach.

The net share of Americans who say home prices will rise declined 2 percentage points from April to May, although 49 percent still expect home prices to rise over the next 12 months.

Source: Fannie Mae National Housing Survey.

The net share that expects mortgage rates to decline over the next 12 months increased by 4 percentage points month-over-month, and the percentage of Americans who expect rates to rise fell from 54 percent to 49 percent.

Source: Fannie Mae National Housing Survey.

Access to mortgage credit is not an obstacle for the majority of consumers surveyed by Fannie Mae, with 60 percent saying obtaining a mortgage would be easy, 2 percentage points more than in April. The part that said it would be difficult to get a mortgage fell one percentage point from April to May, to 35 percent.

Source: Fannie Mae National Housing Survey.

Fannie Mae converts the information collected each month from approximately 1,000 homeowners and renters into a home buying sentiment index. The index increased one point from April to May, to 80.0, which is 12.5 points more than at the same time last year.

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