Fannie Mae said consumer confidence in the real estate market stalled in July with the surge in coronavirus infections.
After two months of building, the Home Purchase Sentiment Index [HPSI] fell from 76.5 in June to 74.2 in July, off a cliff from the survey high of 93.7 a year earlier.
"Supply constraints appear to be putting pressure on consumer price expectations, which in turn has significantly reversed optimism about whether this is a good time to buy and further improving the sentiment about home sales," said Doug Duncan, senior vice president and chief economist at Fannie Mae, said in a press release.
Positive attitudes to current buying conditions overshadowed negative feelings by 15 percentage points. However, the contingent of potential buyers who thought it was a bad time to buy grew 11 percentage points from June and 7 percentage points year over year.
A much bigger difference came from the seller side. While consumers were fundamentally divided as to whether July was a good time to buy a home, the bad sentiment rose 25 percentage points and the good mood rose 22 percentage points from the previous year. In the short term, the negative sentiment persisted from June onwards, with positive delivery increasing 4 percentage points, likely due to intense competition among buyers and rising prices.
Job loss concerns resolved, and those worried about their jobs over the next 12 months fell from 26% in June to 23% in July. Although this sentiment was only 9% in July 2019, the net share of households reporting significantly higher incomes than a year ago fell from 9% m / m to 6% and from 21% year-on-year to 6%.
"Unsurprisingly, renters, 18-34 year olds, and households making less than $ 100,000 – more than any other respondent group – think it's a bad time to buy a home, which in our opinion, the prospect of home buying activity is less favorable for the first time, ”said Duncan. "In the months ahead, we continue to expect consumer sentiment to be closely related to the country's progress in containing the spread of the virus."