Pessimism Increases Among Young Homebuyers
The National Housing Survey along with a few other opinions knocked Fannie Mae’s Home Purchase Sentiment Index down almost 3 points from December and over 5 points in its reading YTD.
Most people believe that now is not the time to purchase a home, and who can blame them? Home Sentiment fell to an all-time low with 70% of able homebuyers voting that now is not a good time to buy a home. Inventory is at an all time low, home values are skyrocketing and rates are steadily increasing over 10 bps every day meaning that home affordability is at an all time low, especially among younger households. Younger generations are usually the most optimistic about their overall finances, but their pessimism is slowly turning the tide. Experts say this is all driven by young aspiring homeowners having to delay their dream of home ownership until affordable supply comes back. Realtors are seeing multiple offers on each property, occasionally as many as 20, and clients are beaten out by all cash deals, sometimes even from an investment bank or private fund buying up all of the property that they can.
Optimism towards interest rates has declined as well. The net percentage of consumers who expect mortgage rates to decline was unchanged at 4%, however those who expect rates to dip went down 2% to a negative 54%.
America’s national debt topped $30trillion, per figures from the Treasury Department early this week. Combine America’s debt with climbing rent prices, affordable housing stock at an all-time low, elevated healthcare, an ever-aging population, and a tax system that cannot cover its spending. Ignore these factors at your own risk!