And consumers are also expecting rates to continue lower
Housing sentiment saw further improvement in May as more consumers said it was a good time to buy.
The Fannie Mae Home Purchase Sentiment Index gained 3.7 points month-over-month to 92.0, narrowly missing out on a new survey high which was last set in May 2018 (92.3).
The boost was driven by a 13-point jump for the net share of Americans who felt that it was a good time to buy (27%) although this was 1% lower than a year earlier.
The net share of those who say it is a good time to sell a home remained unchanged at 43%, 3 percentage points lower than the same time last year.
The net share of Americans who say mortgage rates will go down over the next 12 months increased 3 percentage points to -37%. This component is up 12 percentage points from the same time last year.
Continued uncertainties
Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae, said that despite the gain for the Index, there are still some remaining uncertainties.
“While consumers’ more favorable mortgage rate outlook suggests continued support for housing affordability, potential homebuyers still face supply constraints,” he warned.
The net share of those who say home prices will go up over the next 12 months increased 5 percentage points to 41%, down 8 percentage points from the same time last year.
Job security, income gains
While the net share of those who were not concerned about losing their job increased 2 percentage points to 76%, this was down 2 points from May 2018.
And the net share of people who said their household income is significantly higher than it was 12 months ago decreased 1 percentage point to 21% but was unchanged from a year earlier.
“While the survey recently resumed its upward trend, consumers’ sense of income growth and job security have moved lower from the highs established earlier in the year, which, if sustained, could weigh on the housing market in the second half of the year,” added Duncan.
