R
eal estate news: Despite a chilly outlook on the housing market, consumers are more optimistic about mortgage rates. A recent Fannie Mae survey revealed that attitudes towards purchasing a home remain unenthusiastic, with only 17% of consumers believing it's a good time to buy, while 65% think it's a good time to sell. However, consumer sentiment has been improving since hitting a low of 62 in October 2022 when mortgage rates surpassed 7% for the first time in decades.

    Optimism around mortgage rates has significantly increased in August, with 39% of respondents expecting rates to decline in the next 12 months, up from July's 29%. This change in outlook comes as mortgage rates continue to trend downward, falling from nearly 7% in early July to around 6.5% in early August and currently standing at 6.35%.

    More consumers are also expecting home prices to decrease in the next year, with 25% of respondents in August believing prices will drop over the next 12 months, up from July's 21%. Meanwhile, 37% of consumers think prices will rise — down from July's 41%. Despite these positive developments for affordability, consumer outlook around affordability has not improved enough to boost enthusiasm for homebuying.

    The August survey also revealed a significant geographic divide over home selling. Only 56% of those in the South believe it's a good time to sell, down 5 percentage points from July, while in the Northeast, the market heavily favors sellers, with 80% of consumers in that region saying it's a good time to sell. This likely reflects the wide geographic variation in new home construction activity, with regions that had a stronger construction response following the pandemic seeing sellers losing some of their negotiating power due to increased supply.