He pointed to the marked improvement in sentiments toward selling, which could signal an influx of existing home listings in the near future. He also noted a lingering optimism among consumers that mortgage rates might see a decline over the next 12 months, which could potentially energize the housing market even more.
“If their expectations come true and rates move closer to the 6% mark by the end of 2024, it’s likely that consumer sentiment on both sides of the transaction will improve, perhaps leading to a further thawing of the housing market. A decline in mortgage rates – and the resulting uptick in sentiment – would obviously bode well for the upcoming spring homebuying season, although affordability will likely remain a significant challenge for buyers, at least until there’s a meaningful addition to net supply,” Duncan said.
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Diving deeper into the HPSI’s components for February reveals more about prevailing housing market attitudes. A slight improvement was seen in the perception of it being a good time to buy, while the sentiment towards selling strengthened significantly. Expectations for home prices in the next 12 months also saw a positive adjustment, with more respondents predicting increases. However, there was a slight dip in the number of people expecting mortgage rates to decrease, reflecting mixed feelings about the future trajectory of rates.
In addition, concerns over job security saw a slight uptick, even as some respondents reported a rise in household income compared to the previous year.
