New data from Fannie Mae shows low interest rates aren’t prompting buyers to aggressively enter the market. The mood is partly driven by a fear over job losses in the next year.
CNBC reports consumer sentiment in housing did improve in August, according to a monthly survey from Fannie Mae, but only because of a big jump in the share of those who think mortgage rates will keep falling. Other components of the survey were not so rosy. Fewer people think now is a good time to buy or sell a home, and fewer said they are not concerned about losing their job in the next year.
In a statement, Doug Duncan, Fannie Mae’s senior vice president and chief economist, said, “Growing expectations that mortgage rates will remain flat or decline are reflected in the [Home Purchase Sentiment Index’s] latest reading, which is now at a survey high even though other indicators of economic and housing market sentiment are flat to negative.
“Unfortunately, much of the lower interest rate environment can be attributed to global economic uncertainties, which appear to have dampened consumer sentiment regarding the direction of the economy. We do expect housing market activity to remain relatively stable, and the favorable rate environment should continue supporting increased refinance activity.”
To read more about the Fannie Mae monthly report, click on the photo above.