A measure of sentiment in the housing market has dropped for the second straight month.
Fannie Mae’s Housing Purchase Sentiment Index was down 4.2 points in July to 86.5 after declining in June but reaching record highs in April and May.
And it’s not just buyers that are tiring of a lack of inventory and ever-increasing prices; sellers are also feeling the pressure of struggling to find a home to move to, rising prices, and higher mortgage rates.
"Survey respondents cite 'high home prices' as the top reason why it is both a good time to sell a home and bad time to buy a home,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “This suggests a contributing factor to the low supply of existing homes for sale is that current owners are reluctant to trade up in a rising price market.”
The shares of consumers citing favorable mortgage rates as a reason why it's a good time to buy or sell a home both dropped to fresh survey lows.
The net share of survey respondents who said now is a good time to buy a home fell 4 percentage points, while the net share who said it is a good time to sell a home fell 6 percentage points.
Respondents believe prices will ease
The net share of survey respondents who said that home prices will go up in the next 12 months decreased 7 percentage points while the expectation of lower mortgages rates was up slightly but remained a negative (-52%).
The net share who say their income is significantly higher than it was 12 months ago rose 2 percentage points to 21%, matching the survey high from May 2018.