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

B2Core v2.1 Release

Tamta

B2Broker Unveils B2Core v2.1 with Savings Functionality, New Trading Platform, Fresh PSPs, and UI Enhancements

B2Core version 2.1 has arrived with a new savings feature, massive UI upgrades, TradeLocker trading platform integration, and fresh PSPs. Discover more.

Technology
The Future of Digital Currency Is Arriving Fast. Can the Fed Catch Up?
The Future of Digital Currency Is Arriving Fast. Can the Fed Catch Up?

When was the last time you paid for groceries or coffee using dollar bills rather than a swipe of a card or your phone? You (and I) are part of a disappearing breed if you still use cash.

Crypto
Get the ultimate solution: B2BinPay Get the ultimate solution: B2BinPay
Sponsored
Anna

How to Identify And Trade Using Hammer Candlestick Pattern
Candlestick patterns are easy to recognise and use. Learn how to trade using one of the most popular formations — the hammer candlestick pattern.

discover
How to Start Investing In Crypto

Tamta

How to Start Investing In Crypto

In a world where digital transactions are becoming the norm, one phrase has lately become trendy: cryptocurrency.

Investing
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

    Constantine

    Best DAO Projects in 2025

    Best DAO projects in 2025

    Alexander

    Crypto Nodes That Pay: Your 2025 Guide to Top Passive Income Opportunities in Crypto

    crypto nodes that pay

    Alex

    Pi Network: Scam or Groundbreaking Crypto? The Full Analysis

    Pi Network Explained

    Constantine

    Triple Net Lease: Meaning, Benefits, and Strategies Explained

    Triple Net Lease

    Constantine

    Hanging Man Pattern: How to Identify and Trade It Effectively

    Hanging Man Pattern

    Alex

    5 Infinite Banking Mistakes That Could Cost You Thousands

    Infinite Banking Mistakes to Avoid

    Aleksander

    Solana Firedancer: Solving Solana’s Biggest Problems with a New Engine

    Solana Firedancer explained

    Alexander

    What Is an Interest Coverage Ratio? How to Use This Financial Metric to Evaluate Company Health

    Interest Coverage Ratio Explained

    Hazem

    After-Hours Trading: Can You Trade After Financial Markets Close?

    After-Hours Trading Explained

    Alexander

    How to Scale a Crypto Exchange Business and Stay Competitive

    how to scale crypto exchange business

    Constantine

    Crypto CrypticStreet Review: The Future of DeFi and Secure Crypto Trading

    Crypto CrypticStreet Review: The Future of DeFi and Secure Crypto Trading

    Alexander

    Bitcoin Power Law Explained: How It Shapes BTC’s Long-Term Growth

    Bitcoin Power Law Explained: How It Shapes BTC’s Long-Term Growth

    Hazem

    Megaphone Pattern​: What Is It? How to Use It In Trading

    Megaphone Pattern​: How to Read & Trade with It

    Constantine

    Top 5 Liquidity Bridge Providers in DeFi

    Top 5 Liquidity Bridge Providers in DeFi

    Hazem

    Max Funded IUL Explained: Is It a Legitimate Financial Strategy?

    Understanding Max Funded IUL

    Alexander

    Tax Refund Timeline: When Will You Get Your Tax Return?

    how long does it take for tax refund

    Constantine

    Crypto Liquidity — What is it, and How to Measure It?

    What is Crypto Liquidity and How to Measure It?

    Constantine

    AI in Finance: A Game-Changing Trend Shaping the Industry

    AI in Finance

    Hazem

    5 Ways to Make Money with ChatGPT and Build Your Wealth

    Make Money with ChatGPT

    Constantine

    Top AI Companies to Invest in April 2025

    Top AI Companies to Invest in March 2025

    DeepSeek vs ChatGPT: Which AI Technology is Better For You?

    DeepSeek vs ChatGPT: Feature-by-Feature AI Tool Comparison

    Constantine

    Top Solana Meme Coins in 2025: Best Presales and Where to Buy

    Solana Meme Coins 2025

    Alexander

    How Renewable Energy Stocks Can Supercharge Your Portfolio

    How Renewable Energy Stocks Supercharge Your Portfolio

    SEC Crypto Regulations: What Financial Advisors Need to Know

    SEC Crypto Regulations: Insights for Financial Advisors
    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.