Consumers Expect More Increases in Home and Rent Prices

Sentiment toward homebuying is the lowest it's been in two years
real estate agent showing a house

The majority of people believe that now is a bad time to buy a home, and consumers don't expect prospects to improve soon.

Would-be homebuyers face a dizzying culmination of obstacles, including record-high inflation, increasing competition for homes and rising mortgage rates. The result is a negative outlook on homebuying, with consumer sentiment at the lowest it's been since May 2020, according to Fannie Mae's April 2022 National Housing Survey.

Attitudes toward housing

In Fannie Mae's most recent survey, respondents shared their perspectives on the current housing market, as well as their expectations for the coming 12 months. Here's what respondents said:

  • 76% believe it's a bad time to buy a home, up from 73% in March
  • 73% (a record high) expect mortgage rates to continue rising over the next 12 months
  • 43% believe it would be difficult to get a mortgage today, up from 36% a year ago
  • 70% expect rental prices to increase over the next 12 months

While the survey focuses primarily on buying, respondents may be on the mark about rent prices as well. According to a separate survey conducted in January, 61% of landlords said they had plans to increase rental prices for at least one of their properties in the coming year.

But despite their increasingly negative views toward the housing market, consumers also reported some positive changes. Fewer people are concerned that they'll lose their jobs than a year ago (11% versus 16%, respectively) and 26% say their income is significantly higher than it was 12 months ago.

Advice for buyers

Despite low homebuyer sentiment, nearly 70% of people told Fannie Mae that their next move would involve buying rather than renting. And in a separate survey, as many as 84% of people expressed an interest in moving to a top-50 metro area — notably, with high-cost cities like New York, San Diego and Los Angeles polling highest.

For consumers considering a move, it might take some creative planning to find a home within their budget. Here are some pointers to help make homebuying more affordable:

  • Be flexible on location. Housing prices haven't spiked everywhere. Some metro areas, such as Honolulu, Hawaii, and Hartford, Conn., are expected to see nearly stagnant prices, according to a projection for 2022 housing prices. If you're set on moving, consider a location with a slower market, or look at cities just outside of your ideal destination.
  • Look into homebuyer assistance programs. You may be eligible for special homebuyer programs in your state, city or otherwise. Going this route could mean lower down payment requirements, financial assistance to help with your purchase or access to more affordably priced homes.
  • Consider refinancing instead. Instead of buying a new home, refinancing now could help you save money by getting you a lower interest rate — especially if you made your home purchase before the 2020-21 low rate period. Plus, it'll help you avoid entering a seller's market.
  • Wait and save. Now may be a bad time to buy, but the market won't stay this way forever. Waiting can help you avoid inflation and give you time to get better prepared for buying, by saving more for a down payment and improving your credit score.

Methodology: The April 2022 National Housing Survey was conducted between April 2-25, 2022, by PSB, in coordination with Fannie Mae. Fannie Mae's survey polled 1,001 household decision makers aged 18 and older via live telephone interview to track changes in respondents’ attitudes towards housing (findings are compared with those of previous editions of the survey, which has been conducted monthly since June 2010).

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