Optimism about the U.S. housing market may have peaked after hitting its all-time high in August, according to a measure of consumer sentiment.
The Fannie Mae Home Purchase Sentiment Index slid 2.3 points in September to 91.5, down from 93.8, its peak a month earlier. It was the greatest percentage point loss since December 2018. This follows a steep increase in sentiment in the first eight months of 2019. The waning optimism may reflect anxiety about the national economy after the yield curve inverted, signaling a looming recession, and amid weak manufacturing and services data and the September jobs report, which showed hiring slowed.
“Consumer sentiment remains relatively strong overall, though uncertainty about the economy and individual financial circumstances appear to be weighing on housing market attitudes a bit more than a month ago,” said Doug Duncan, senior vice president and chief economist of Fannie Mae, in a statement.
The latest Fannie Mae National Housing Survey found that just over half of Americans said the economy is on the right track, but a strong 40% said it is on the wrong track. The study showed that more Americans think the time is right to buy or to sell, though respondents favored selling over buying 44% to 28% respectively.
As the preference to sell rose, fewer Americans believe home prices would rise in the next 12 months. Only 29% of respondents thought home prices would continue to rise in the next 12 months, a 7 percentage point drop from last month, continuing a three-month decline. Home price growth was unchanged in July, after a 15-month slowdown, according to the latest S&P CoreLogic Case-Shiller national home price index.
Low mortgage rates are top of mind with 28% saying now is a good time to buy, up 3 percentage points, with fewer folks believing rates would continue to fall. There was a 6 percentage point decrease in respondents who thought mortgage rates would go down, meaning they think the lowest interest rates are available now.
Sarah Paynter is a reporter at Yahoo Finance. Follow her on Twitter @sarahapaynter
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