Good News, Bad News In Fannie Mae Survey
Summary
The bad news is that they don’t think it’s as good a time to buy one because of concerns over rising home costs and mortgage interest rates, according to a Fannie Mae national housing survey. “A survey-record share of consumers – particularly homeowners and higher-income individuals – expect mortgage rates to increase in the next 12 months, likely owing to signals that the Fed will raise rates to slow the pace of inflation,” Doug Duncan, Fannie Mae senior vice president and chief economist, said. “Continued negative perceptions around homebuying conditions were offset in part this month by consumers’ increased sense of job security, which we believe is likely due to labor market tightness and declining COVID case counts,” he said. “However, with recent geopolitical events creating additional economic uncertainty – including likely increasing inflationary pressure – we believe the additional headwinds will compound existing affordability constraints to further soften mortgage demand in the coming year.” The survey of about 1,000 people was conducted between Feb. 1 and Feb. 22, prior to Russia’s invasion of Ukraine. The questions ask consumers whether they think that it is a good or bad time to buy or to sell a house, what direction they expect home prices and mortgage interest rates to move, how concerned they are about losing their jobs, and whether their incomes are higher than they were a year earlier.