risleyteam@jasonrisley.com

LANGUAGES

Risley Team

Realtors For Living And Investment

call now

949-929-1575

June 2024 Housing Market Sentiment: A Glimmer of Optimism Amid Affordability Concerns

July 24,2024 | Posted By Jason Risley in Buying

Fannie Mae's Home Purchase Sentiment Index (HPSI) showed a promising rebound in June 2024, climbing 3.2 points to reach 72.6. This increase brings the index closer to the highs seen earlier this year, recovering from a dip in the previous month.

Understanding the HPSI

The HPSI is built from responses to six questions in the National Housing Survey (NHS). These questions assess consumer perceptions of the housing market and factors influencing their home-buying decisions. Topics include whether it’s a good or bad time to buy or sell a home, expectations for home prices and mortgage rates, job security concerns, and changes in household income over the past year.

Compared to the same time last year, the HPSI has risen by 6.6 points, indicating an overall improvement in consumer sentiment.

Key Insights from June 2024

Is It a Good Time to Buy?

Good Time to Buy: 19% of respondents believe it’s a good time to buy a home, up from 14% in May.
Bad Time to Buy: The percentage of those who say it’s a bad time to buy decreased from 86% to 81%.
Net Change: The net share indicating it’s a good time to buy increased by nine percentage points month-over-month.

Why It Is a Good Time to Buy

Favorable Interest Rates: Although mortgage rates have been fluctuating, there are still opportunities to lock in favorable rates compared to historical highs.
Market Stability: With home prices expected to rise, purchasing now could be a wise investment to avoid higher prices in the future.
Increased Inventory: The market is seeing an increase in listings, providing more options for buyers to find their ideal home.
Job Security: With 79% of consumers feeling secure in their jobs, the financial stability to make a significant purchase like a home is more attainable.

Is It a Good Time to Sell?

Good Time to Sell: 66% think it’s a good time to sell a home, up from 64% in May.
Bad Time to Sell: The percentage of those who say it’s a bad time to sell fell from 35% to 33%.
Net Change: The net share stating it’s a good time to sell increased by four percentage points month-over-month.

Why It Is a Good Time to Sell

High Home Prices: Home prices remain strong, providing sellers with the opportunity to maximize their return on investment.
Buyer Demand: Despite affordability concerns, there is still significant demand from buyers looking to purchase homes.
Quick Sales: Homes are moving quickly in the market, reducing the time a property remains listed.
Market Confidence: With increased consumer confidence in job security and household income stability, buyers are more likely to proceed with purchasing decisions.

Home Price Expectations

Prices Will Rise: 45% expect home prices to rise in the next 12 months, up from 42%.
Prices Will Fall: Those expecting prices to drop decreased from 18% to 17%.
Prices Will Stay the Same: The share who think prices will stay the same dropped from 40% to 36%.
Net Change: The net share predicting price increases rose by three percentage points month-over-month.

Mortgage Rate Expectations

Rates Will Decrease: 24% foresee mortgage rates decreasing in the next 12 months, down from 25%.
Rates Will Increase: Those expecting rates to rise went up from 31% to 33%.
Rates Will Stay the Same: The share predicting rates will remain unchanged at 42%.
Net Change: The net share anticipating lower rates decreased by two percentage points month-over-month.

Job Security

Not Concerned: 79% are not worried about losing their job in the next 12 months, up from 75%.
Concerned: The percentage concerned about job loss fell from 24% to 20%.
Net Change: The net share of those not concerned about job loss increased by eight percentage points month-over-month.

Household Income

Income Higher: 16% report their household income is significantly higher than a year ago, down from 20%.
Income Lower: Those with significantly lower income fell from 12% to 10%.
Income the Same: The share whose income remained the same rose from 67% to 72%.
Net Change: The net share of those with higher income compared to a year ago decreased by two percentage points month-over-month.

Brighter Days on the Horizon?

In June 2024, Fannie Mae found that nearly 19% of consumers thought it was a good time to buy a home, an increase from May's 14%, which was a record low. The percentage of those who believed it was a good time to sell also increased, from 64% to 66%. More consumers also believed that home prices and mortgage rates would rise over the next year. Regarding household finances, 79% of consumers felt secure in their jobs, up by four percentage points from May. Overall, the HPSI is up 6.6 points compared to the same time last year.

Mark Palim, Fannie Mae's VP and Deputy Chief Economist, noted that affordability concerns still drive consumer sentiment, despite a slight increase in optimism about home buying and selling conditions.

Looking into the Crystal Ball

Future trends in mortgage rates will be crucial for the market for the rest of the year. Freddie Mac’s Primary Mortgage Market Survey (PMMS) showed the 30-year fixed-rate mortgage rose to 6.86% by the end of June.

“If mortgage rates decline as forecasted, home sales activity might increase, although progress could be slow due to the imbalance between supply and demand,” said Palim. “Most consumers still view it as a bad time to buy a home and expect home prices and mortgage rates to rise over the next 12 months. This suggests that sentiment will remain low until affordability improves, either through lower rates or better supply. However, the market remains favorable for sellers, with high home prices cited as the main reason it’s a good time to sell.”

In summary, while there are signs of increased optimism in the housing market, affordability remains a significant concern for many consumers. The future path of mortgage rates will be key in shaping the housing market dynamics in the coming months.

Testimonials

"Jason Risley is an expert in real estate. He has helped me in the negotiation process and I successfully bought the house that is...

- Nikki Nguyen

View All Testimonials

Popular Pages

Location

25950 Acero, Suite 100
Mission Viejo, CA 92691

949-929-1575

DRE# 01755580

Real Estate Websites by Strategic Agent Inc.