The Fannie Mae Home Purchase Sentiment Index (HPSI) decreased 3.4 points in June to 64.8, its second-lowest reading in a decade. Surveyed consumers continue to express pessimism about homebuying conditions, with only 20 percent of respondents reporting it’s a good time to buy a home, while the percentage of consumers who believe it’s good to sell now fell from 76 percent to 68 percent in July, according to Fannie Mae.

Overall, four of the index’s six components decreased month-over-month, including the components associated with perceived job stability and household income. Notably, a survey-high 81 percent of consumers believe the economy is on the “wrong track” and, for the first time in nearly seven years, a plurality of respondents said it would be difficult to get a mortgage, potentially a function of elevated home prices and higher mortgage rates. Year-over-year, the full index is down 14.9 points.

“In June, a survey-record 81 percent of consumers reported that the economy is on the wrong track, suggesting to us – and corroborated by other recently released consumer confidence measures – that people appear to be growing increasingly frustrated with inflation and the slowing economy,” Fannie Mae Senior Vice President and Chief Economist Doug Duncan said in a release. “Moreover, 21 percent of respondents expressed job stability concerns, the highest percentage in 18 months. This month’s HPSI reading reflects these macroeconomic and personal financial concerns, with housing sentiment additionally diminished by the recent rapid increases in mortgage rates.

“Interestingly, consumers’ perceptions of home-selling conditions declined meaningfully in June, returning to pre-pandemic levels. This was particularly true for homeowner respondents,” Duncan added. “At the same time, consumers, especially those in prime homebuying groups, appear to be feeling the affordability pinch of higher mortgage rates.

Duncan pointed out that approximately half of all respondents indicated it would be ‘difficult’ to get a mortgage, the highest such percentage since 2014. As a whole, this month’s HPSI results are consistent with Fannie Mae’s forecast of a slowing housing market through the rest of this year and next, he said.

The good/bad time to buy takeaways were:

• The percentage of respondents who say it is a good time to buy a home increased from 17 percent to 20 percent, while the percentage who say it is a bad time to buy decreased from 79 percent to 75 percent. As a result, the net share of those who say it is a good time to buy increased 7 percentage points month-over-month.
• The percentage of respondents who say it is a good time to sell a home decreased from 76 percent to 68 percent, while the percentage who say it’s a bad time to sell increased from 19 percent to 26 percent. As a result, the net share of those who say it is a good time to sell decreased 15 percentage points month-over-month.
• The percentage of respondents who say home prices will go up in the next 12 months decreased from 47 percent to 44 percent, while the percentage who say home prices will go down increased from 23 percent to 27 percent. The share who thinks home prices will stay the same decreased from 25 percent to 23 percent. As a result, the net share of Americans who say home prices will go up decreased 7 percentage points month-over-month.
• The percentage of respondents who say mortgage rates will go down in the next 12 months increased from 4 percent to 5 percent, while the percentage who expect mortgage rates to go up decreased from 70 percent to 67 percent. The share who thinks mortgage rates will stay the same increased from 20 percent to 21 percent. As a result, the net share of Americans who say mortgage rates will go down over the next 12 months increased 4 percentage points month-over-month.
• The percentage of respondents who say they are not concerned about losing their job in the next 12 months decreased from 81 percent to 78 percent, while the percentage who say they are concerned increased from 16 percent to 21 percent. As a result, the net share of Americans who say they are not concerned about losing their job decreased 8 percentage points month-over-month.
• The percentage of respondents who say their household income is significantly higher than it was 12 months ago decreased from 26 percent to 25 percent, while the percentage who say their household income is significantly lower remained unchanged at 16 percent. The percentage who says their household income is about the same increased from 54 percent to 58 percent. As a result, the net share of those who say their household income is significantly higher than it was 12 months ago decreased 1 percentage point month-over-month.