Feb. 7 (UPI) — When it comes to home sales in the United States, it’s a seller’s market right now, according to a monthly report on Monday by government-sponsored mortgage company Fannie Mae.
According to the assessment, just 25% of respondents said in January that it’s a good time to buy a home, a record low — while almost 70% said it’s a good time to sell.
The main reasons for the decline, Fannie Mae said, are rising home prices and the number of available homes.
“Affordability and supply constraints continue to limit home purchase opportunities, particularly among younger households,” said Fannie Mar Chief Economist Doug Duncan said in a statement.
“Younger consumers more so than other groups expect home prices to rise even further and they also reported a greater sense of macroeconomic pessimism.”
Fannie Mae’s Home Purchase Sentiment Index in January fell to its lowest level since May 2020.
“While the younger respondents are typically the most optimistic about their future finances, this month their sense of optimism around their personal financial situation declined,” Duncan added.
“All of this points back to the current lack of affordable housing stock, as younger generations appear to be feeling it particularly acutely and, absent an uptick in supply, may have their homeownership aspirations delayed.”
The National Association of Realtors recently said the median home price in the United States in December was $358,000, up almost 16% year-to-year. Home prices have increased each year for the past 10 years, the longest-running streak on record.
Real estate experts have said that pensions and private-equity firms are snatching up homes by outbidding young homebuyers, which typically lead to “permanently more expensive” prices.
The increase in home prices coincides with an increase in the rental market, which is also hitting potential homebuyers and possibly preventing them from owning a home.
A study from market research firm RealPage in December found that rent and occupancy rates for apartments nationwide had risen to new heights, even as the rental and housing markets entered the historically slow winter season.
Apartment occupancy reached 98% in November — up significantly from the norm of around 95% over the past three decades. Meanwhile, the national average for new move-in leases reached $1,631 in November — up 0.4% from October.
The Federal Reserve Bank of Dallas said last summer that surging home prices were “expected to propel rent increases,” and indicated that rental costs would likely continue to grow through 2023.