The number of Americans who think it’s a bad idea to buy a home right now rose in October, according to a monthly sentiment survey released Thursday by mortgage giant Fannie Mae.
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A net share of 21 percent Americans said it was a good time to purchase a home, which was down from 28 percent from September. That's about 57 percent of Americans who think it's a good time to buy a home. The share of people who think it’s a good time to sell a home also dropped, from 44 percent to 41 percent.
Plummeting mortgage rates caused buyers to rush in to snap up property earlier this year. That led to a shortage of affordable housing, which caused a spike in prices.
“The ‘good time to buy’ component has declined notably, despite low mortgage rates, due in part to the persistent challenge of a lack of affordable housing supply,” Doug Duncan, Fannie Mae’s senior vice president and chief economist, said in a statement.
Even though only 27 percent of consumers — the lowest amount in seven years — expect home prices to increase next year, housing data says otherwise. According to the National Association of Realtors median sales price climbed 5.9 percent from last year to $272,100, the 91st straight month of year-over-year gains.
“Home prices are rising too rapidly because of the housing shortage, and this lack of inventory is preventing home sales growth potential,” Lawrence Yun, NAR’s chief economist, said in a statement.
The 30-year fixed mortgage rate has dropped 1.16 percent from the year-ago period to an average of 3.69 percent, according to mortgage finance agency Freddie Mac.