In today’s sellers’ market, many homeowners are weighing their options and trying to decide if they should sell their house. If you’re in that group, you may be balancing things like the ongoing health crisis, rising mortgage rates, and your own changing needs to determine your best time to make a move.
However, recent data shows that time may already be here. According to the latest Home Purchase Sentiment Index (HPSI) by Fannie Mae, 69% of consumers believe now is a good time to sell.
Looking back over the past few years, its clear consumers are optimistic today, although that optimism waned somewhat in January 2022. The majority of respondents still say it’s a good time to sell a house.
“Consumer sentiment toward housing softened further in January – the HPSI fell 2.4 points to 71.8 – as affordability and supply constraints continue to limit home purchase opportunities, particularly among younger households,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “Younger consumers – more so than other groups – expect home prices to rise even further, and they also reported a greater sense of macroeconomic pessimism. Additionally, while the younger respondents are typically the most optimistic about their future finances, this month their sense of optimism around their personal financial situation declined. All of this points back to the current lack of affordable housing stock, as younger generations appear to be feeling it particularly acutely and, absent an uptick in supply, may have their homeownership aspirations delayed. On the whole, the latest HPSI results are consistent with our forecast of slowing housing activity in the coming year.”
Home Purchase Sentiment Index – Component Highlights
Fannie Mae’s Home Purchase Sentiment Index (HPSI) decreased in January by 2.4 points to 71.8. The HPSI is down 5.9 points compared to the same time last year. Read the full research report for additional information.
- Good/Bad Time to Buy: The percentage of respondents who say it is a good time to buy a home decreased from 26% to 25%, while the percentage who say it is a bad time to buy increased from 66% to 70%. As a result, the net share of those who say it is a good time to buy decreased 5 percentage points month over month.
- Good/Bad Time to Sell: The percentage of respondents who say it is a good time to sell a home decreased from 76% to 69%, while the percentage who say it’s a bad time to sell increased from 17% to 22%. As a result, the net share of those who say it is a good time to sell decreased 12 percentage points month over month.
- Home Price Expectations: The percentage of respondents who say home prices will go up in the next 12 months decreased from 44% to 43%, while the percentage who say home prices will go down decreased from 19% to 14%. The share who think home prices will stay the same increased from 30% to 35%. As a result, the net share of Americans who say home prices will go up increased 4 percentage points month over month.
- Mortgage Rate Expectations: The percentage of respondents who say mortgage rates will go down in the next 12 months remained unchanged at 4%, while the percentage who expect mortgage rates to go up increased from 56% to 58%. The share who think mortgage rates will stay the same decreased from 30% to 28%. As a result, the net share of Americans who say mortgage rates will go down over the next 12 months decreased 2 percentage points month over month.
- Job Concerns: The percentage of respondents who say they are not concerned about losing their job in the next 12 months decreased from 82% to 78%, while the percentage who say they are concerned increased from 16% to 17%. As a result, the net share of Americans who say they are not concerned about losing their job decreased 5 percentage points month over month.
- Household Income: The percentage of respondents who say their household income is significantly higher than it was 12 months ago remained increased from 23% to 26%, while the percentage who say their household income is significantly lower decreased from 17% to 14%. The percentage who say their household income is about the same decreased from 59% to 56%. As a result, the net share of those who say their household income is significantly higher than it was 12 months ago increased 6 percentage points month over month.
Why Are Consumers So Optimistic About Today’s Housing Market?
From record-high equity gains to record-low housing supply and significant buyer demand, homeowners have more motivation than ever to sell. There are more buyers in today’s market than there are homes for sale, and that’s driving home prices up, making it a great time to sell your house.
According to the National Association of Realtors (NAR), the current supply of homes for sale today is at a 1.8-month supply, which is an all-time low. When the supply of homes for sale is low, sellers will likely see more offers, which is exactly what’s happening right now. As NAR notes:
“The average home for sale is receiving 3.8 offers today, up from 3.3 offers just one year ago.”
Bottom Line
With the inventory of houses for sale so low today pushing home prices in an upward direction, it’s no wonder consumers think it’s a good time to sell. If you’re ready to take advantage of today’s favorable sellers’ market, let’s connect today.