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Just over 1 in 3 Americans thought it was a good time to buy a home in May according to Fannie Mae’s regular consumer survey, down from just under half of the country the previous month.

The figure – 35 percent of respondents – marks a historic low for the Home Price Sentiment Index survey, Fannie Mae chief economist Doug Duncan said in a statement. It also marks the second consecutive month of declines in the indicator, down from a 2021 high of 53 percent in March and 57 percent in November 2020.

“[C]onsumers appear to be acutely aware of higher home prices and the low supply of homes, the two reasons cited most frequently for that particular sentiment,” Duncan said.

The U.S. median home price surged 19.1 percent in April from a year earlier, to a record $341,600, according to the National Association of Realtors.

Homes are being snapped up within days. Nearly 90 percent of homes sold in April were on the market for less than a month, according to the NAR.

The share of survey respondents who said it was a bad time to buy only increased from 48 percent in April to 56 percent. That represents a significant increase from prior months, with the indicator sitting at 40 percent in March and hovering around 35 percent of survey respondents throughout the latter half of 2020.

Fannie Mae’s survey data appears to show that growing pessimism about homebuying could signal worries about their buying power.

The share of respondents who thought home prices would go up dropped slightly, from 49 percent to 47 percent, while the share of those who said prices would be stable rose by an equivalent amount, to 29 percent. On average, survey respondents believed that home prices would rise 3.8 percent in the next 12 months, up from 1.9 percent in April and 3.1 percent in March.

Over half of survey respondents continued to believe mortgage rates would go up, although the share dropped from 54 percent in March and April to 49 percent and may, with a corresponding increase in the share of those who thought rates would be stable, to 38 percent.

Economic anxiety appears not to be a factor in respondents’ beliefs about homebuying. Nearly all (87 percent) reported they were not concerned with losing their job in the next 12 months and nearly one-third reporting that they believed their household income will grow significantly in that same period, a sharp uptick from the 21 percent figure in April and even lower readings in February.

These concerns about homebuying did not appear to dampen enthusiasm for selling. The share of respondents who thought it was a good time to sell stayed flat at 67 percent, while the share who thought it was a bad time to sell slid down a percentage point to 25 percent.

Fannie Mae’s Home Price Sentiment Index polls about 100 questions with 1,000 nationally-representative consumers each month.

The Associated Press contributed to this report.

Survey Finds Homebuyer Pessimism Grew as Prices Surged

by James Sanna time to read: 2 min