{"id":163920,"date":"2024-01-03T14:59:45","date_gmt":"2024-01-03T21:59:45","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=163920"},"modified":"2024-01-15T04:19:43","modified_gmt":"2024-01-15T11:19:43","slug":"fannie-mae-housing-sentiment-index-november-2023","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/fannie-mae-housing-sentiment-index-november-2023","title":{"rendered":"Housing Confidence Has Bottomed Out\u2014But Experts Say There\u2019s Light at the End of the Tunnel?"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC2659144948\" width=\"100%\"><\/iframe>\r\n  \n\n\n\n\n<p><span data-preserver-spaces=\"true\">For all the recent talk about&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/federal-reserve-to-lower-rates-six-times-says-ing-economics\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">a possible interest rate easing in 2024<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;and the low likelihood of a severe recession, people are still feeling pessimistic. The Fannie Mae&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.fanniemae.com\/research-and-insights\/surveys-indices\/national-housing-survey\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Home Purchase Sentiment Index<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;for November is out, and it paints a general picture of low confidence among both homebuyers and home sellers.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">As interest rates began to climb in 2022, consumer confidence in the housing market began to plummet, reaching their lowest levels by late 2022. Confidence stabilized somewhat in 2023 but quickly reached what Fannie Mae is calling a \u2018\u2018low-level plateau.\u2019\u2019<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Fannie Mae measures home purchase sentiment by collecting data from its questionnaire. The questionnaire, which uses responses from 1,000 adults (aged 18-plus) who are household decision-makers, has several components, including people\u2019s perceptions of whether right now is a good time to buy or sell, concerns about the job market, and expectations about interest rates.<\/span><\/p>\n\n\n\n\n\n\n  <div class=\"lg:block\" x-data=\"{ ad_block_block_6595d852d9f47: popAds(1) }\">\n      <template x-for=\"ad in ad_block_block_6595d852d9f47\">\n        <a\n          :href=\"ad.linkURL\"\n          class=\"no-underline text-black\"\n          x-on:click=\"adClicked('https:\/\/www.biggerpockets.com\/blog\/fannie-mae-housing-sentiment-index-november-2023', ad.sponsor, ad.title, ad.id, 'blockAdClicked', 'blockAd', '')\"\n          target=\"_blank\">\n          <div\n            class=\"py-4 border-b flex flex-col flex-nowrap text-sm border-t px-0 rounded-none\"\n            x-init=\"\n              analytics.track('blockAdLoaded', {\n                referrer: 'https:\/\/www.biggerpockets.com\/blog\/fannie-mae-housing-sentiment-index-november-2023',\n                sponsor: ad.sponsor,\n                ad_title: ad.title,\n                ad_page_location: ''\n              })\n            \"\n            x-intersect:enter.once=\"adViewed('https:\/\/www.biggerpockets.com\/blog\/fannie-mae-housing-sentiment-index-november-2023', ad.sponsor, ad.title, ad.id, 'blockAdViewed', 'blockAd', '')\">\n            <div><span class=\"text-xs text-slate-light block bg-slate-50 p-1 inline-block rounded-md\">Sponsored<\/span><\/div>\n            <div class=\"flex items-center text-sm space-x-4\">\n                <img :src=\"ad.imageURL\" :alt=\"ad.imageAlt\" class=\"h-10 w-10 object-cover rounded-full\">\n\n                <div clas=\"text-sm\">\n                    <span class=\"font-bold block\" x-text=\"ad.sponsor\"><\/span>\n                    <span class=\"text-slate\/80\" x-text=\"ad.description\"><\/span>\n                <\/div>\n            <\/div>\n\n            <div>\n                <span class=\"font-bold\" x-text=\"ad.title\"><\/span>\n                <p class=\"mt-2 text-slate\/80\" x-text=\"ad.body\"><\/p>\n                <span class=\"mt-2 text-themeBlue block mt-2 underline\" x-text=\"ad.linkTitle\"><\/span>\n            <\/div>\n          <\/div>\n        <\/a>\n      <\/template>\n  <\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Economic Uncertainty Means a Muted Outlook<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">The November result is not encouraging for real estate investors. While the mood is not quite as gloomy as it was last year\u2014the overall index is up 7 points year over year\u2014there clearly is a long way to go before consumer confidence in the housing market is restored in any meaningful way.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The most stark figure in the index is the meager 14% of respondents who believe that now is a good time to buy a home, which is a new survey low. This incredibly low number is, of course, tied in with respondents\u2019 increasingly downbeat expectations about the interest rate trajectory, as well as their own purchasing power, as unemployment continues to climb and the economic outlook remains uncertain.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Doug Duncan, Fannie Mae senior vice president and chief economist, points out in a news release that at the end of last year, as interest rates reached 7%, \u2018\u2018a rate level not seen in over a decade, a plurality of consumers said they expected home prices to decrease; however, that optimism faded over the course of 2023.\u2019\u2019<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Currently, 22% of survey respondents think that mortgage rates will go down in 2024. That\u2019s an increase of 8% from the month before, but this optimistic outlook is still seen in the minority of respondents, with the majority thinking that rates will either go up further (44%) or stay the same (34%).<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Add to this the fact that 24% of those surveyed believe&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/on-the-market-163\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">home prices<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;will go down, while the majority again believe that home prices will continue going up or will stay the same, and the overall picture becomes clear: Right now, consumers simply don\u2019t believe that&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/on-the-market-145\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">affordability<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;will improve.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">To top it off, most consumers are experiencing stagnating or declining household incomes, with 68% saying their income has stayed about the same and 12% reporting it was significantly lower than before. Only 19% said their income significantly increased.&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">What People on the Ground Are Saying&nbsp; &nbsp;<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">No one should be surprised that people who are losing confidence in their financial stability while witnessing continually increasing home prices and interest rates don\u2019t have much faith in their ability to buy a home\u2014or are reluctant to put their current home on the market.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">We spoke to licensed real estate agent&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/reerin.com\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Erin Hybart<\/span><\/a><span data-preserver-spaces=\"true\">, who says that in her experience, sellers \u201care hesitant to list if they do not have to sell because they know buyers are stretched thin financially with higher interest rates. There&#8217;s also worry about affording the&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/what-is-a-mortgage\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">mortgage<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;on their next house and the interest rates at the current level.\u2018\u2019<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">However, Hybart is noticing a somewhat different attitude among buyers who are \u2018\u2018still in the game, often grabbing deals from motivated sellers or on outdated houses.\u2019\u2019 Those who really want a home of their own are still trying to get one\u2014they\u2019re just smarter about it, and they\u2019re prepared to compromise on size.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">This is actually good news for real estate investors and&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/guides\/how-to-flip-houses\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">house flippers<\/span><\/a><span data-preserver-spaces=\"true\">. Hybart points out: \u2018\u2018Now&#8217;s a good time to buy smaller, fixer-upper homes, as there&#8217;s a growing demand for move-in ready, smaller houses as housing affordability declines.\u2019\u2019<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Realtor and chief lending officer at New Jersey-based&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/approvedfunding.com\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Approved Funding<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;Shmuel Shayowitz also tells BiggerPockets that his on-the-ground experience isn\u2019t as bad as the report makes out, adding, \u2018\u2018My clients are starting to get more active in the market with the recent rate drop.\u201d&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Whether the Fed will drop rates next year, as is widely speculated, remains to be seen. If rates do begin to come down next year and the U.S. avoids the much-talked-about recession, consumer confidence in the housing market is very likely to bounce back.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">And if rates don\u2019t go down? LA-based&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/ashbygraff.com\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Ashby &amp; Graff Real Estate<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;CEO John Graff offers BiggerPockets readers a word of tough wisdom: \u2018\u2018Buyers and sellers will have to get used to our new normal.\u2019\u2019<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">The Bottom Line<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Has the housing market been increasingly difficult to navigate? Without a doubt, both buyers and sellers know this. However, the desire to own a home is likely to eventually override all misgivings for many people. Investors who can offer a value-for-money, ready-to-move deal in local markets where demand for single-family homes is high may still be in luck despite the current pessimism.&nbsp;<\/span><\/p>\n\n\n\n    \n  <div id=\"visibility-group-block_f58de87fbd770c2e639e35308c5e333c\" class=\"visibility-group alignwide  hidden\">\n        \n\n<div id=\"hero-block_e2dde5cc63938e1fe788b863c45d0610\" class=\"first:mt-0 hero-block py-4  alignwide   has-background has-slate-200-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\"gap-10 lg:gap-20 flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 lg:w-1\/2 \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-slate-800-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Find the Right Agent, Close the Best Deal<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:18px\">Step #1: Use Agent Finder to match with top <em><strong>investor-friendly<\/strong><\/em> real estate agents to help you find, analyze, and close your next deal.<\/p>\n\n\n\n<div id=button-custom-event-block_b07ab85abcb85e89a5e1bf937fb53937 class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/agent\/match\" x-on:click=\"window.analytics.track(&#039;Blog Block | B2C Marketplace Agent Finder&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/fannie-mae-housing-sentiment-index-november-2023&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Find an Agent<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\"lg:w-1\/2 first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/08\/Marketplace-Blog-Blocks-Agent-v3.png\" alt=\"investor friendly real estate agent\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n  <\/div>\n  \n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n    \n  <div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n        \n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<h3 class=\"wp-block-heading my-0 tracking-tight font-extrabold has-theme-slate-dark-color has-text-color has-large-font-size\">Join the community<\/h3>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n\n\n\n<div id=button-custom-event-block_64dd2888dba9e class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/signup\" x-on:click=\"window.analytics.track(&#039;Blog Block | Acquisition | Free Membership Signup&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/fannie-mae-housing-sentiment-index-november-2023&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Sign Up<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n  <\/div>\n  <\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Fannie Mae&#8217;s Home Purchase Sentiment Index hit all-time lows last year, but now experts say we&#8217;ve turned a corner. Here&#8217;s what you need to know.<\/p>\n","protected":false},"author":613618,"featured_media":161461,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8,7119],"tags":[],"class_list":["post-163920","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-trends","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/163920","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613618"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=163920"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/163920\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/161461"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=163920"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=163920"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=163920"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}