Mortgage rates are still twice what they were a year ago, but home prices have been falling since June, and that’s finally making consumers feel better about what had been an overheated, highly competitive housing market.
A monthly housing sentiment index from Fannie Mae showed sentiment improving from November to December. The index is still lower than it was a year ago and just slightly off its record low set in October and November.
The share of respondents saying now is a good time to buy a home was still low, at just 21%, but it was up from 16% in October. The share saying now is a bad time decreased.
On selling, however, sentiment continued to drop. The share of respondents saying now is a good time to sell dropped to 51% from 54%, while the share saying now is a bad time to sell increased.
More consumers now believe home prices will fall in the next 12 months, and more also said they believe mortgage rates will come down.
The average rate on the popular 30-year fixed mortgage hit a recent high of 7.37% in October but then fell back into the mid-6% range throughout November and into December.
Adding to the confidence in housing, the share of consumers who said they were concerned about losing their jobs in the next 12 months dropped from 21% to 17%.
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