Housing confidence has never been higher

But buyers may need some more convincing

By Steve Randall

08 May 2018

A monthly barometer of consumer confidence in the US housing market hit an all-time high in April.

The Fannie Mae Home Purchase Sentiment Index hit 91.7 after rising 3.4 points, with five of its six components gaining.

However, the net share of buyers who think now is a good time to buy was down 3 percentage points compared to March.

"The latest HPSI reading edged up to a new survey high, showing that consumer attitudes remain resilient going into the spring/summer home buying season," said Doug Duncan, senior vice president and chief economist at Fannie Mae.

He said that high home prices and good economic conditions helped push the share who think it's a good time to sell to a fresh record high but while that measure has been trending higher for a year, it has not helped with tight inventory.

“The tightest supply in decades, combined with rising mortgage rates from historically low levels, will likely remain a hurdle for mobility and a persistent headwind for home sales," said Duncan.

Why are buyers becoming more cautious?

While sellers might need some convincing to list their home (although a net share of 45% said it’s a good time to do so), buyers certainly need persuading.

A net share of just 29% of buyers think it’s the right time to buy and a net 49% of all respondents believe home prices will continue higher in the next 12 months. Expectation of lower mortgage rates in that time is -48% (although this is 4 points higher than in March).

The index’s measures of confidence in job security, and those reporting increased incomes from a year ago, were both higher in the April reading from the previous month.