More consumers keep a wary eye on coronavirus-hit housing market

As the coronavirus crisis unfolds, an unprecedented number of consumers are growing more certain that buying or selling a home amid a pandemic isn't such a great idea.

Overall, the Fannie Mae Home Purchase Sentiment Index (HPSI) nosedived 17.8% to 63 points in April, marking its lowest month-over-month reading since November 2011. The annual HPSI reading is down 25.3 points.

"The 17.8-point decrease reflected consumers' deepening concerns about both their incomes and the housing market," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "Attitudes about whether it's a good time to sell a home fell most sharply, dropping an additional 23 points this month."

Expectations of low mortgage rates remained the only driver of consumer optimism. The other five HPSI components posted month-over-month decreases as heightened uncertainty about job security weighs on prospective homebuyers' outlooks toward the housing market.

Duncan said that prospective homebuyers might be more concerned about the substantial, long-term financial commitment of a mortgage.

Other HPSI component highlights were:

• The net share of Americans who say it is a good time to buy a home decreased from 56% in March to 48% in April. Year over year, the component decreased 18 percentage points
• The net share of Americans who think it is a good time to sell plunged from 52% to 29%. Year over year, the component decreased 52% in April
• The net share of Americans who expect home prices to go up in the next 12 months fell from 39% to 23%. Year over year, the component decreased 28 percentage points
• The net share of Americans who believe mortgage rates will go down in the next 12 months climbed from 20% to 23%. Year over year, the component increased nine percentage points
• The net share of Americans who say they are not concerned about losing their job in the next 12 months edged down from 77% to 76%. Year over year, the component decreased 1% last month
• The net share of Americans who reported that their household income is significantly higher than it was 12 months ago dipped from 27% to 20%. Year over year, the component rose 17 percentage points

"While consumers did grow more pessimistic in April about whether it's a good time to buy a home, low mortgage rates remain a driver of purchase optimism," Duncan said. "We expect that the much steeper decline in selling sentiment relative to buying sentiment will soften downward pressure on home prices."