When it comes to the current housing market, the outlook is grim for many Americans.Thank you for reading this post, don't forget to subscribe!
In a Fannie Mae survey last month, 84% of respondents expressed that now is an inappropriate time to buy a home – a record high for the monthly report that surveys 1,000 consumers with more than 100 questions about the current market.
In contrast, only 16% considered it a favorable time to buy a home, which is the same low as last year.
Doug Duncan, senior vice president and chief economist at Fannie Mae, said higher mortgage rates are fueling consumer fears about the housing market.
“With mortgage rates consistently above 7 percent, consumers are becoming increasingly uneasy about the home buying market,” Duncan said in the report. “In fact, higher mortgage rates have outstripped higher home prices, making it the top reason consumers think it’s a bad time to buy a home, says a survey earlier.”
RELATED: ‘All hell is about to break loose’: Barbara Corcoran issues warning about real estate market, interest rates
Duncan said unfavorable mortgage rates were also the top reason why respondents considered it a bad time to sell a home.
Is it a good time to buy a home?
Despite high interest rates and the grim outlook of recent survey respondents, some experts suggest now is a good time to buy – before rates eventually go down again.
“As mortgage rates fall, and more buyers come back into the market, home prices will rise,” Melissa Cohn, regional vice president of William Davis Mortgage, wrote in a newsletter obtained by Bankrate. “Remember, you ‘marry the house and set the rate date.’” (Meaning buyers can take the rate now but can always refinance later.)
In June, “Shark Tank” star Barbara Corcoran said buyers should take advantage of this day, because when rates inevitably fall, the market will pick up again.
“Right now, the thing everyone is afraid of is higher interest rates,” Corcoran said in an interview with Fox’s “The Claman Countdown.” “But as soon as interest rates go down, the whole crisis will end and prices will skyrocket.”
If you’re in the market, Emma Hernan, a real estate agent with The Oppenheim Group and star of Netflix’s “Selling Sunset,” told CNBC in August that real estate is the “best investment” anyone can make, and buyers should be intentional. Should be – in any market – where they shop.
“It’s best to buy the smallest house in the best neighborhood because you’re buying into the neighborhood. Your value will go up much faster,” Hernan told the outlet. “You never buy the best house in the worst neighborhood.”