REZ - Fannie Mae survey shows pessimism in housing market hit new high in September

2023-10-09 18:02:09 ET

According to data from government-sponsored mortgage finance agency Fannie Mae ( OTCQB:FNMA ) on Monday, the share of consumers expressing pessimism about homebuying conditions hit a new survey high in September as elevated mortgage rates continued to push housing sentiment lower.

In FNMA's Home Purchase Sentiment Index (HPSI) update for last month, 84% of consumers indicated that it was a bad time to buy a home. The overall headline HPSI reading decreased by 2.4 points in September to 64.5.

"Mortgage rates persistently over 7 percent appear to be deepening the malaise consumers feel about the home purchase market," Doug Duncan, Fannie Mae ( OTCQB:FNMA ) senior VP and chief economist said in a statement .

"In fact, high mortgage rates surpassed high home prices as the top reason why consumers think it's a bad time to buy a home, a survey first," Duncan added.

The FNMA data comes just days after fellow government-sponsored mortgage finance agency Freddie Mac's ( OTCQB:FMCC ) Primary Mortgage Market Survey showed a continued surge in the average 30-year fixed-rate mortgage to 7.49%, its highest level in over two decades. Meanwhile, mortgage applications have dropped to their lowest level since 1996.

According to Fannie Mae's ( OTCQB:FNMA ) HPSI report, only 16% of consumers in September said it was a good time to buy a home, matching the all-time survey low set last year. Moreover, only 17% of consumers expect mortgage rates to go down over the next 12 months.

"Consumers are also not seeing much affordability relief in sight, as they continue to expect home prices to increase in the next 12 months," FNMA's Duncan said.

Duncan added that home purchase affordability would remaining a problem for the foreseeable future, which in turn would keep home sales sluggish into next year.

U.S. housing market-related stocks and ETFs: Toll Brothers ( TOL ) +2.1% , Lennar ( LEN ) +1.9% , NVR ( NVR ) +1.9% , D.R. Horton ( DHI ) +1.7% , PulteGroup ( PHM ) +1.3% , Meritage Homes ( MTH ) +1.1% , Tri Pointe Homes ( TPH ) +1.1% , KB Home ( KBH ) +0.8% , LGI Homes ( LGIH ) +0.2%; iShares Mortgage Real Estate Capped ETF ( REM ) +2.2% , iShares Residential and Multisector Real Estate ETF ( REZ ) +1.4% , SPDR S&P Homebuilders ETF ( XHB ) +1% , The Hoya Capital Housing ETF ( HOMZ ) +0.7% .

More on the housing market

• D.R. Horton Is A Good Deal Right Now
• New Homes More Unaffordable Than During Housing Bubble
• A Big Homebuilder Stock Price Reset Is Coming
• Toll Brothers Can Likely Withstand Higher Rates
• You Gotta Pay The Landlord First

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