Consumer confidence in home buying plummets 18%
Consumer confidence in the housing market fell in February, with fewer Americans sharing positive thoughts on mortgage rates, home buying and home prices, according to Fannie Mae.
Fannie's Home Purchase Sentiment Index fell 3.7 points from a year ago with the net share of consumers reporting it's a good time to buy a home plummeting 18% in February. Potential homeowners continued to be challenged by declines in affordability and supply.
After spiking at the beginning of the year, fewer consumers are also anticipating a decline in mortgage rates. The share of consumers expecting rates to fall decreased 2% from a year ago and 7% from January to February.
"Volatility in consumer housing sentiment continued into February, with the new tax law beginning to impact respondents' take-home pay and the stock market creating negative headlines due to early-month turbulence," Doug Duncan, senior vice president and chief economist at Fannie Mae, said in a press release.
"Additionally, consumers' expectations for higher mortgage rates suggest that consumers expect the Fed to hike rates a few more times in 2018. We will continue to track how consumer housing attitudes trend in the coming months as these various market forces play out," he continued.
In February, the percentage of Americans believing home prices will go up remained unchanged from a year ago, but still declined 7% from the previous month.
Fewer consumers shared positive sentiments on job security, with the share having confidence in not losing a job falling 7% from the previous year.
Fannie Mae's HPSI for February 2018 is based on responses from 1,005 financial household decision makers aged 18 and older between Feb. 1 and Feb. 23.