Rising prices changing buyers' perception of housing market
The percentage of people who said July was a bad time to buy a home increased to a survey high because of rising prices, according to Fannie Mae.
The Fannie Mae Home Purchase Sentiment Index fell 1.5 percentage points from June to 86.8; compared with July 2016, it is a scant 0.3 percentage points higher.
Approximately 34% of those surveyed considered July a bad time to buy a home, the most since Fannie Mae started tracking this data in 2010. It was up from 32% in June and 33% in May, the previous high.
Meanwhile the percentage who felt that July was a good month to buy was 57%, down from 62% in June and 60% in May.
Even more telling, only 28% of those surveyed felt July was a good time to sell, down 11 percentage points from June. Potential sellers were worried about the direction of the economy.
"It's clear that high home prices are a growing challenge helping to send buying sentiment to a record low," said Fannie Mae Chief Economist Doug Duncan in a press release.
"However, we find the notable decline in selling sentiment surprising. If it persists, this month's decrease in optimism regarding the direction of the economy, which appears to coincide with rising uncertainty regarding the outlook for pro-growth legislation this year, could weigh on overall housing sentiment in the second half of the year."
Only 16% of those surveyed said their household income was significantly higher than it was one year ago, a decline of one percentage point since June.
Nearly 47% of those surveyed felt prices will continue to rise, up one percentage point from June, while those that felt a mortgage rate increase was likely over the next 12 months was unchanged at 49%.