US Real Estate Sentiment Freezes Too... 69% Say "Now Is the Time to Sell a House"

Highest Ever Seller Sentiment Since 2010 Survey
Home Purchase Sentiment Index Also at 71.8, Comparable to Early COVID-19 Levels

[Image source=AP Yonhap News]

[Asia Economy Reporter Kim Hyunjung] The U.S. real estate market is entering a cooling phase as the Federal Reserve's (Fed) announcement of interest rate hikes has caused mortgage rates to surge sharply, and concerns over job stability are spreading. Three out of four Americans now believe it is a 'good time to sell a house,' while the perception that it is a good time to buy a house has dropped to the lowest level since the survey began.

Bloomberg reported on the 7th (local time) that Fannie Mae, the U.S. government-sponsored mortgage guarantor, conducted a telephone survey of 1,000 Americans from the 1st to the 24th of last month, revealing these responses. According to the survey, 69% of respondents said now is a 'good time to sell a home,' the highest since the survey started in 2010. Conversely, only 25% said it is a 'good time to buy a home,' marking a record low.

Fannie Mae's monthly Home Purchase Sentiment Index (HPSI) also fell to 71.8, down 2.4 points from the previous month and 5.9 points from the same month last year, reaching its lowest level since May 2020, the early stage of the COVID-19 pandemic.

This recent trend is due to rapidly rising home prices driven by increased owner-occupier demand after the COVID-19 outbreak, combined with the Fed's announcement of interest rate hikes causing mortgage rates to rise sharply. Following the spread of COVID-19 and low interest rates, demand for spacious suburban homes surged in the U.S., and last year, the average home price in the U.S. recorded double-digit monthly growth rates, setting record highs.

However, due to the excessive rise in home prices, homes priced within an affordable range have disappeared from the market. Additionally, the 30-year fixed mortgage rate rose by 1 percentage point compared to a year ago, leading to an increase in potential buyers postponing home purchases, according to U.S. media analysis. Doug Duncan, Senior Vice President at Fannie Mae, said, "Compared to other groups, younger buyers are more pessimistic about the macroeconomy and expect home prices to rise much further." He added, "Even among generations that usually have a positive outlook on their future financial situation, optimism is weakening."

The significant weakening of Americans' purchasing power, making the dream of 'owning a home' harder to achieve, also aligns with this sentiment. According to a study released the same day by the National Association of Realtors (NAR), the number of homes affordable to households earning between $75,000 and $100,000 decreased by 411,000 compared to before the COVID-19 pandemic. At the end of 2019, one home was affordable for every 24 households in this income bracket, but by December last year, this worsened to one home per 65 households.

This content was produced with the assistance of AI translation services.