Nearly three-quarters of U.S. consumers say the economy is on the ‘wrong track,’ a survey released by Fannie Mae Thursday showed.
Fannie Mae’s Home Purchase Sentiment survey showed that the share of Americans saying the economy is on the wrong track rose to 73 percent in March, the highest level in 11 years. In February, 68 percent responded that the U.S. economy is on the wrong track.
The share of Americans who expect their personal financial situation to worsen over the next year jumped to 25 percent, the highest ever recorded.
Sixty-nine percent of respondents—also a record high—indicated that they expect mortgage rates to continue their upward ascent. On net, the “Good Time to Buy” component set a new survey low, with 73 percent of respondents reporting that it’s a bad time to buy a home. Year over year, the full index is down 8.5 points.
“The ‘Good Time to Buy’ component of the index reached yet another record low, with high home prices, rising mortgage rates, and macroeconomic uncertainty serving as consumers’ chief concerns,” said Mark Palim, Fannie Mae Vice President and Deputy Chief Economist. “Only 24 percent of consumers believe it’s a good time to buy a home, with similar levels of pessimism expressed by nearly all of the demographic groups surveyed.”
Concerns over worsening financial situation, together with the run-up in mortgage rates since the end of 2021, will likely diminish mortgage demand from move-up buyers, Palim said. Fewer move-up buyers will mean fewer available entry-level homes, adding to the rising-rate challenges for potential first-time homebuyers.
“If consumer pessimism toward homebuying conditions continues and the recent mortgage rate increases are sustained, then we expect to see an even greater cooling of the housing market than previously forecast,” Palim said.
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