Homebuyer Sentiment Plummets To Lowest Level Since May 2020

Feb 07, 2022

Homebuyer Sentiment Plummets To Lowest Level Since May 2020

According to recent numbers assessing homebuyers' confidence, a record low proportion of Americans say that now is a good time to acquire a house, as affordability constraints limit options for young purchasers.

Only one out of every four survey participants on Fannie Mae's Home Purchase Sentiment Score, issued Monday, said it's a great time to buy a house, with the total index sliding 2.4 points to 71.8 in January. This is the weakest figure since May 2020, and it is down 5.9 points from the comparable period of 2021.

The precipitous dip in January indicates rising worries among both sellers and buyers, especially among younger individuals. Generally, four of the six index components fell, with the house sale and purchase circumstances, employment instability worries, and mortgage rate forecast falling the most.

"Younger customers, more than any other group, anticipate house prices to climb even more, and they also indicated a larger feeling of economic hopelessness," stated Doug Duncan, Fannie Mae's chief analyst. "While younger interviewees are normally the most hopeful about their future money, their feeling of confidence about their own financial condition has decreased in January."

https://liquidity-provider.com/app/uploads/2022/02/unnamed-44.png

Housing sentiment drifted lower among younger respondents, as many feel the pressure of tightening affordability and rising mortgage rates.

Buyers have ample right to be concerned. Mortgage rates are currently growing as more than 45 million younger generations approach their peak first-time house purchasing ages of 26 to 35, on top of soaring property prices and restricted property supply, which have been putting pressure on house accessibility for some time.

"All of this leads back to the present scarcity of cheap property securities," Duncan noted, "since millennials seem to be experiencing it very intensely and, without an increase in supply, their property ownership ambitions may be postponed."

As Black Knight data showed, buyers of houses are experiencing serious housing scarcity, with the United States seeing a shortfall of between 500,000 and 750,000 active listings contrasted to December 2017-2019 inventory levels.

Furthermore, low inventory levels spurred house price increase in late 2021 and early 2021, with the average house price climbing by an unprecedented 0.84% in January.

https://liquidity-provider.com/app/uploads/2022/02/unnamed-45.png

This has increased the monthly housing costs for first-time purchasers. For example, the monthly principal and interest payment to buy the average house with 20% down hit a record peak of $1,454, according to Black Knight, up to $350 or 32% from a year earlier.

According to Black Knight, it currently takes 25.8% of the typical family wage to pay on a 30-year mortgage, up from 22.4% at the end of Q3 2021.

"Interest rate increases over the last week have swiftly driven us above the long-term, pre-Great Recession average payment-to-income ratio of 25%," remarked Ben Graboske, Black Knight's data, and analytics president. "Right to the lowest levels of availability since 2008." According to Optimal Blue's rate lock data, homeowners are spending more in points to counteract current rate increases, further narrowing accessibility for prospective homebuyers, said Graboske.

Mortgage rates recently stopped after hitting a 22-month peak in January. Even though the 30-year fixed mortgage rate stayed unchanged last week at 3.55%, this may not last long.

Unexpectedly outstanding job numbers released on Friday revealed almost 500,000 new payroll positions in January, indicating that the central bank may speed preparations to increase interest rates to fight inflation, which is at a 40-year peak.

Consequently, the 10-year Treasury yield, which is often used to follow fixed mortgage rates, increased.

"The 10-year Treasury bond yield is at its greatest level since the outbreak, at 1.9%," noted Lawrence Yun, chief economist for the National Association of Realtors. "Mortgage rates will rise in lockstep with inflation."

Subscribe Our Newsletter

Netflix Stock Had Its Worst Day in Nearly 2 Decades. Wall Street Is Saying
Netflix Stock Had Its Worst Day in Nearly 2 Decades. What Wall Street Is Saying

Netflix lost 200,000 customers in the third quarter, falling far short of its target of 2.5 million net additions. The streaming platform would have gained 500,000 customers if it had not lost 700,000 Russian subscribers. The business expects to lose 2 million net users in the June quarter.

Companies
Rivian, Robinhood, Bumble: How Some Of 2021's Biggest IPOs Are Faring
Rivian, Robinhood, Bumble: How Some Of 2021’s Biggest IPOs Are Faring

The largest IPOs of 2021 and 2020, as assessed by the amount of money collected, demonstrate that stocks of the top five IPOs of last year performed worse than those of the largest IPOs to go public in 2020.

Companies
B2BROKER Liquidity B2BROKER Liquidity
Sponsored
Oliver

Benefits of Using Cryptocurrency Services for Merchants
Many people around the world have undoubtedly heard of blockchain technology and cryptocurrencies. Crypto wallets, as well as alternative payment methods, are evolving alongside it, and they are transforming the way we do business online. Merchants using payment processors convert bitcoins and other crypto assets instantly into fiat currency.

discover
bonk airdrop guide

Constantine

Bonk Airdrop Guide: How Can You Claim Free Tokens?

Get to know the Bonk project, learn about its origins, features, and how the Bonk airdrop will impact the Solana ecosystem in the future.

Blockchain
Contact us bg

Contact Us

Contact the Liquidity Provider
for any questions and advertising inquiries

    Please fill out this contact form to get in touch with us

    / 3000

    By clicking “Get in touch” button, you agree to the privacy policy

    Successful!
    Thank you for your request.
    We will contact you shortly.
    Close

    Hazem

    MetaTrader vs cTrader: Which Trading Platform Shall You Choose?

    MetaTrader vs cTrader: The Full Breakdown

    Сonstantine

    Will Dogecoin Reach $1? Tokenomics and Price Analysis

    Will Dogecoin Reach 1 Dollar Analysis

    Сonstantine

    How to Get a Crypto Exchange License?

    How to Get Crypto Exchange License

    Сonstantine

    Best Crypto to Buy Now: Guide for Investors

    Best Crypto To Buy Now

    Hazem

    Grok vs ChatGPT: What’s the Best AI Assistant You Need in 2025

    Grok vs ChatGPT

    Сonstantine

    How to Choose the Right Liquidity Provider for Your Brokerage

    How to Choose the Right Liquidity Provider for Your Brokerage

    Сonstantine

    Low-Latency Trading Defined: Speed, Strategy and Technology

    Low-Latency Trading Explained

    Hazem

    How Liquidity Depth Affects Slippage in High-Volume Trading

    Liquidity depth and slippage in trading

    Hazem

    What is FIX API Liquidity Connection and How Does it Power Institutional Trading?

    FIX API in institutional trading

    Сonstantine

    OTC Trading Strategies and Technologies to Succeed in Over-the-Counter Markets

    OTC Trading Strategies

    Alexander

    What is OTC Trading? A Complete Guide for 2025

    what is OTC

    Alexander

    Synthetic Futures: A Trader’s Guide to Replicating Positions with Options

    How to Trade Synthetic Futures

    Сonstantine

    Order Book Depth: What It Is And Why It Matters?

    Order Book Depth What It is And Why It Matters

    Alexander

    Spot vs Perpetual Futures: Which Is Right for You?

    Spot vs Perpetual Futures explained

    Hazem

    5 Reasons Traders Are Switching to Perpetual Futures

    5 Reasons to Switch to Perpetual Futures

    Constantine

    Top 3 Liquidity Challenges Facing New Exchanges and How to Solve Them

    Top 3 Liquidity Challenges Facing New Exchanges Today

    Constantine

    Financial Planning in the Cryptocurrency Era — Master Crypto and Digital Asset Strategies

    Financial Planning in the Cryptocurrency Era

    Hazem

    Best Platforms to Trade Perpetual Futures in 2025

    Best platforms to trade perpetual futures in 2025

    Alex

    Top 10 Fintech Website Development Agencies for 2025

    Best Fintech Website Development Agencies for 2025

    Сonstantine

    Internal vs External Range Liquidity In ICT Trading Explained

    Internal vs External Range Liquidity In ICT Trading

    Constantine

    Portfolio Backtesting — Tools, Metrics, and Methods Explained

    Portfolio Backtesting

    Сonstantine

    ICT Trading Explained: Smart Money Concepts, Tools and Setups

    ICT Trading Explained

    Сonstantine

    CFD Trading Strategies: A Practical Guide to Risk and Execution

    CFD Trading Strategies

    Alexander

    What is a Fair Value Gap? A Guide to Trading Market Imbalances

    What is Fair Value Gap
    liquidity-provider-logo
    • News
      • Stock Market Forecast
      • Stocks
      • Banks and Finance
      • Companies
      • Crypto
      • Forex
      • AI
      • Technology
      • DeFi
      • NFT
    • Articles
      • Crypto Payments
      • Trading
      • Crypto Exchange Business
      • Forex Business
      • Fintech
      • Liquidity
      • FinTech Awards
      • Blockchain
      • Investing
      • NFT
      • DeFi
    • More
      • Videos
      • Liquidity Providers List
      • Crypto Payment Providers
      • White Label Brokerage Platforms
      • Broker CRM Platforms
    [email protected]

    © 2024 Liquidity Provider. All Rights Reserved

    Privacy Policy Cookie Policy
    This site is registered on wpml.org as a development site. Switch to a production site key to remove this banner.