Housing confidence is plummeting

Spooked by rising rates and economic uncertainty, both buyers and sellers are pulling back from the housing market.

Fannie Mae’s Home Purchase Sentiment Index dropped 4.1 points in October to a record low of 56.7, marking its eighth consecutive monthly decline.

Only 16% of respondents said that now is a good time to buy a home, while the percentage who believe now is a good time to sell a home continued to decline.

“Consumers are increasingly pessimistic about both homebuying and home-selling conditions,” says Doug Duncan, the mortgage company’s senior vice president and chief economist.

“As continued affordability constraints reduce homebuyer demand, and homeowners become reluctant to sell at potentially reduced prices, we expect home sales to slow even further in the coming months, consistent with our forecast.”

Economists at Goldman Sachs are forecasting home prices will drop by 5-10% next year.