More Americans Than Ever Think It’s a Bad Time to Buy a Home
February 8, 2022
Potential homebuyers are feeling pessimistic as home prices continue to climb and rising mortgage rates make pricey homes less affordable.
A monthly survey from Fannie Mae showed that home purchase sentiment in January fell to the lowest level since May 2020, when the economy was in the midst of a deep recession following the start of the pandemic.
Only one-quarter of those surveyed said now is a good time to buy a home, a record low. Conversely, 69% of the respondents said now is a good time to sell.
Affordability is the main concern for most respondents. Home prices were up 18.5% annually in December, an acceleration from the 18.1% gain in November, according to data from CoreLogic.
Respondents also reported concerns about rising mortgage rates. Rates have climbed steadily since the start of the year. The interest rate for a 30-year fixed loan is now at 3.87%, more than a full percentage point higher than a year ago, and it is likely to keep climbing as the Federal Reserve tightens monetary policy.
The survey also found that young homebuyers are feeling the most pessimistic about the housing market right now, expecting themselves to be priced out of the market as home prices and mortgage rates continue to climb.