The number of Americans who feel confident enough to buy or sell fell significantly in December 2017, undoing the previous month’s increase in confidence.
According to Fannie Mae’s monthly Home Purchase Sentiment Index, which surveys 1,000 consumers about a number of factors related to the housing market, overall consumer confidence dipped 2 points to close out 2017, though it’s up 5.1 points from the same time last year.
The net share of Americans who think now is a suitable time to buy fell 5 percentage points to 24 percent, while the net share who feel the market is suitable for selling stayed the same at 34 percent.
Consumers also were polled on other factors pertaining to the state of the housing market, but their responses were less than positive, with four of six HPSI components decreasing. The number of respondents who are not worried about losing their jobs fell 6 percentage points from last month to 68 percent. On top of that, the net share of consumers who feel mortgage rates will decrease fell 1 percentage point.
Housing prices, however, were a beacon of hope for respondents, with the net share of people who believe home prices will increase in the coming year decreasing by 2 percentage points to 44 percent. Still, for the most part, consumers are feeling tentative going into 2018, mostly because of the latest tax changes and their impact on the housing market.
“Consumers remained cautious in their housing outlook at the end of 2017, as tax reform discussions continued,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Entering 2018, housing affordability remains a persistent challenge, particularly in rental markets, where consumer expectations for price increases over the next 12 months reached a new survey high.”