If you need assistance, please call 754-581-5077

Tables turn as market conditions begin to favor buyers, survey says

Friday, September 9, 2022   /   by Dave Magua

Tables turn as market conditions begin to favor buyers, survey says

The pandemic ushered in an atypically strong sellers’ market that gave homesellers the leverage to sell overpriced abodes that sparked bidding wars among eager buyers willing to pay five to six figures above the asking price.

However, macro and microeconomic factors — namely inflation and rising mortgage rates — have begun to gradually tip the scales and dampen homesellers’ outlook on the market.

Released on Thursday, Fannie’s Home Purchase Sentiment Index declined 0.8 points to 62 — the lowest reading in a decade and the sixth month of consecutive declines. Whereas declining sentiment has typically been on the homebuyer sideover the past two years, homesellers are also now feeling the burn as they have to temper asking prices, deal with longer days on market, the return of contingencies and in some markets, even make price cuts.

“The share of consumers expecting home prices to go down over the next year increased substantially in August. Accompanying this, HPSI respondents reported a significant decrease in home-selling sentiment,” Fannie Mae Senior Vice President and Chief Economist Doug Duncan said in a written statement. “We also observed a large decline in consumers reporting high home prices as the primary reason for it being a good time to sell a home, suggesting that expectations of slowing or declining home prices have begun to negatively affect selling sentiment.”

Although declining home prices are welcome news for homebuyers, Duncan said other market headwinds make it hard for them to celebrate. Seventy-three percent of homebuyers told Fannie Mae it’s still “a bad time to buy” as mortgage rates increase and affordability continues to worsen.

“Lower home prices would obviously be welcome news for potential first-time homebuyers, who are likely feeling the combined affordability constraints of the high home price and high mortgage rate environment,” Duncan said. “In fact, the survey’s ‘ease of getting a mortgage’ component dropped to an all-time low among this typically younger demographic (i.e., 18- to 34-year-olds).”

As sentiment continues to fluctuate, Fannie Mae said homebuyers and homesellers are more likely to take a wait-and-see approach to entering the housing market with both sides hoping for a favorable shift in the coming months.

“With home prices expected to moderate over the forecast horizon and economic uncertainty heightened, both homebuyers and home-sellers may be incentivized to remain on the sidelines – homebuyers anticipating home price declines and potential home-sellers not keen to give up their lower, fixed mortgage rate – contributing to a further cooling in home sales through the end of the year,” Duncan said.


  #real estate #south florida #luxury real estate #buy and sell #dave magua #home decor #real estate agent #luxury life #luxury homes # miami realtor #dave magua group #we sell houses #jplantation #weston island #beach front properties #real estate investor #investment property #family home #boca raton #boca #home #illustrated #real estate#compass, palm beach county, south florida, broward county, mortgage, jupiter, palm beach, 2022