In recent months, data about the housing market has shown a shift: Buyers are gaining the upper hand. But now, new survey results have revealed a mismatch between what the numbers say and how consumers feel.
Mortgage giant Fannie Mae reported Monday that its measure of home purchase sentiment decreased to 69.8 in June, ending a three-month streak of gains.
It’s a decrease from the previous month and lower than a year earlier.
June’s decrease also marks the third time since January that consumer sentiment has fallen beneath 70. In 2024, that happened only once.
The survey results contrast with the existing evidence that the housing market pendulum is starting to swing in favor of buyers across the country. For one, home price growth has slowed, stopping in some markets altogether. At the same time, the number of houses for sale has increased, giving buyers more choices.
Consumers haven't taken the cue, though. According to Fannie Mae's findings, they're actually feeling worse about the housing market. That's largely due to economic and geopolitical conditions, especially as confidence in survey categories, such as income and the job market, fell in June.
Buyers likely to gain more power, some economists say
That incongruity between market dynamics and consumer reality had yet to manifest in Fannie Mae's survey until now. In May, for example, five of the survey’s six measures reflected growth in consumer sentiment.
But that flipped in June: Consumers were more pessimistic in five categories, including job loss, mortgage rates, household income, selling conditions and home prices.
The only category that saw positive gains in June was buying conditions, tracking with the larger trend.
Some economists have said buyers will likely continue gaining power throughout the year. Erika Ludvigsen, national director of residential analytics at Homes.com, for example, said the increase in inventory combined with uncertainty among consumers could actually make the market more suitable for buyers.
“As more sellers enter the market, buyers gain options and negotiating power,” she said, “suggesting a slight shift away from a seller's market and towards a buyer's market at the national level."