As prices continue to spiral higher and mortgage rates top 4% for the first time since 2019, less than half of prospective buyers say they believe the next three months is a good time to buy a home.
A new survey from real estate technology company OJO Labs finds homebuyer confidence is at its lowest level since it began tracking that metric last August. While overall sentiment is still positive, it’s moving closer to the group’s neutral baseline.
The survey asked potential buyers to give their feelings about homebuying conditions over the next three months. Just over 47% said they agreed it was a good time, but the percentage of people who strongly disagreed with that opinion outweighed those who were bullish on the real estate market.
That dip in confidence comes as the number of available homes continues to explore new lows. On Friday, Zillow reported that U.S. inventory sank to 729,000 home listings in February. That’s down 25% from February 2021 and a decrease of 48% since February 2020.
That’s not slowing down predictions of continued price increases, however. Bank of America, earlier this week, said it believes U.S. home prices will finish 2022 with prices averaging 10% higher. That’s nearly double the average home price growth since 1989.
The OJO study echoes recent data from Fannie Mae, whose Home Purchase Sentiment Index earlier this month found that most buyers did not believe this was a good time to buy.
“High home prices continue to be the most commonly cited reason by consumers for their belief that it’s a good time to sell (and a bad time to buy) a home; notably, the ‘good time to buy’ sentiment among renters dropped to a new survey low,” said Doug Duncan, Fannie Mae senior vice president and chief economist in a statement.
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