US homebuying sentiment up; owners sense a 'good time to sell'

Reuters

Published Mar 07, 2024 04:41PM ET

By Amina Niasse

NEW YORK (Reuters) - U.S. homebuying sentiment rose for a third consecutive month in February largely because a growing view among current homeowners that now is a good time to sell their house could bode well for a much-needed uptick in home listings.

Fannie Mae’s Home Purchase Sentiment Index increased by 2.1 points in February to 72.8 from 70.7 in January, it said on Thursday. On a year-over-year basis, it rose by more than 25%.

The share of consumers surveyed who said it is a good time to sell a home rose to 65% in February from 60% the month prior. That component was the largest contributor to the index's gain.

"Consumer attitudes toward home-selling conditions increased markedly in February, with current homeowners, in particular, expressing greater optimism that it's a 'good time to sell,' a development that may foreshadow an upcoming increase in existing home listings," said Doug Duncan, Fannie Mae's senior vice president and chief economist.

The inventory of homes for sale remains historically low as homebuilding has failed to keep pace with demand and many current homeowners are locked into lower-rate mortgages secured before interest costs started rising. That has kept many potential sellers from putting their homes on the market.

While the improved seller sentiment foreshadows increased supply, buyer sentiment remained overwhelmingly negative, Duncan said, even as it ticked up slightly to 19% from 17% in January. With interest rates still high, mortgage payment affordability has weighed on would-be buyers, and the net outlook for mortgage rates falling 5 points on a month-over-month basis, the report said.