In November, the Fannie Mae increased again, this time by 0.4 points to 75.0. This marks four consecutive months of gains for the index, which continues to rebound from its low point in summer 2022. Survey respondents were more hopeful than last month about the current state of homebuying and the future of mortgage rates, but more pessimistic than in October when it comes to their incomes and expectations around housing prices. The share of respondents who said that now is a good time to buy a home increased by 3 percentage points, to 23%, and the share saying now is a bad time to buy a home decreased by 3 percentage points, to 77%. Seller sentiment remained steady, as it has for several months, with 64% of respondents saying now is a good time to sell a home and 35% saying now is a bad time to sell a home.
Housing affordability is a primary concern across the country, and there are two major factors that make buying a home unaffordable: high listing prices and high mortgage rates. Survey respondents were more optimistic about home prices than they were last month, with the share reporting that they expect prices to come down rising to 25%, the highest in over a year. The average expected percentage change in home prices over the next 12 months was just +0.7%. At the same time, the share of respondents who expect their personal financial situation to improve over the next 12 months jumped 13 percentage points from October, to 46%, so the sample of the population surveyed here has bullish expectations on their ability to buy a home in the future. As a caveat to the last finding, the share of respondents who expect their personal financial situation to get worse also increased, so what we may be seeing is some election overreaction based on party affiliation.聽
The survey saw a new record level of respondents who believe that mortgage rates will go down, 45% compared to just 25% who believe rates will go up. In the short term, these expectations appear to have merit, as the Freddie Mac 30-year rate dipped below 6.7% last week for the first time since October. In our recently released 2025 Housing Forecast, we project the 30-year mortgage rate to average 6.3% across the year and end it at 6.2%, so there is more room for the improvement anticipated by these survey respondents. A major wild card for mortgage rates and the housing market at large for next year comes in the form of the Trump administration鈥檚 policy agenda. Measures like tariffs, tax cuts, and mass deportations could rekindle inflation across the economy, making additional downward progress for mortgage rates unlikely.聽
One trend in the data that this team has closely examined recently is the narrowing gap between the share of survey respondents who plan to buy their next home and the share who plan to rent it. This month, the gap widened again, with 69% planning to buy compared with 30% planning to rent. Last month, these shares were 63% and 36% respectively. This section of the survey findings is especially interesting because it gives insight into the attitude of prospective buyers on the margin, those whose behavior will be directly affected by market conditions like listing prices, mortgage rates, and income growth. This 6 percentage point swing month to month indicates further that buyers, especially first-time buyers, are feeling more confident.
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