Americans are in limbo about where the housing market could go next, but they are resolute about the conditions for buying right now.
Nearly 80% of Americans think it’s a bad time to buy a house, according to the Fannie Mae Home Purchase Sentiment Index (HPSI), a survey gauging homebuying and selling confidence. The index stayed flat in April compared to the previous month as consumers adjust to elevated mortgage rates that show little promise of easing. The average rate on a 30-year loan stood at 7.22% last week. Consumer confidence is still up 8% year over year.
In addition, fewer Americans believe mortgage rates will decline over the next 12 months, sidelining buyers awaiting affordability improvement.
“Housing sentiment increased from November through February, driven largely by consumer belief that mortgage rates would move lower,” said Doug Duncan, Fannie Mae senior vice president and chief economist. “However, recent data showing stickier-than-expected inflation, rising mortgage rates, and continued home price appreciation appear to have given consumers pause regarding the market’s direction.”
finance.yahoo.com/news/80-of-americans-think-its-a-bad-time-to-buy-a-house-190058819.html
Minneapolis Fed president Neel Kashkari said Tuesday that he believes interest rates will likely need to be held at current levels for an “extended period” and didn’t rule out a hike if inflation stalls near 3%.
“I think it’s much more likely we would just sit here for longer than we expect or the public expects right now until we see what effect our monetary policy is having,” Kashkari said at the Milken Institute conference in Los Angeles.
But if the Fed were convinced that inflation was entrenched at 3% and rates needed to be raised higher, it is possible it would take such an action.
“That’s not my most likely scenario, but I also can’t rule it out,” he said, adding, “I think the bar for us raising is quite high but it’s not infinite. There is a limit when we say, ‘OK, we need to do more.'”
finance.yahoo.com/news/feds-kashkari-rates-will-stay-high-for-extended-period-and-cant-rule-out-a-hike-171309962.html