Persistently high mortgage rates are making people more pessimistic about the housing market
Just 30% of respondents polled by Fannie Mae now expect mortgage rates to fall in the next 12 months, down from 35% in January. Thirty-three percent see mortgage rates rising, and 36% think they'll stay the same.
Those shifting views helped the Fannie Mae Home Purchase Sentiment Index decline 1.8 points in February to 71.6. It notched its first year-over-year decline in nearly two years, falling 1.2 points from February 2024.
Most of the survey was conducted in the first two weeks of February, when mortgage rates remained stuck around 6.9%. In recent weeks, they've fallen to 6.63% amid growing economic uncertainty and President Donald Trump's rapidly evolving tariff policies.
Meanwhile, 41% of survey respondents see home prices rising in the next 12 months from their already high levels.
'While some consumers may be slowly acclimating to the higher mortgage-rate environment, the vast majority continue to believe it is a 'bad time' to buy a home — with high home prices cited as the primary sticking point,' Mark Palim, Fannie Mae's senior vice president and chief economist, said in a statement.
Last month, 76% of survey respondents said they thought it was a bad time to buy a home, down slightly from January's 78%.
Consumers are also growing slightly more wary about their own financial positions. Twenty-three percent of employed respondents said they're concerned about losing their jobs in the next 12 months, up from 22% in January.
Learn more: How much house can I afford with a $70,000 salary?
The net percentage of respondents who reported their incomes had risen significantly in the last 12 months also fell one percentage point to 7%.
The Home Purchase Sentiment Index is derived from select questions from Fannie Mae's monthly National Housing Survey of about 1,000 adults. The February survey was conducted between Feb. 1 and Feb. 18.
Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.
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