Consumers are increasingly pessimistic about housing affordability, expecting a rise in home prices, rents, and mortgage rates despite lower concerns about job losses. Fannie Mae's report indicates that mortgage rate optimism has declined significantly, with expectations of rates exceeding 7%. Predictions suggest mortgage rates will stabilize around 6.5% by the end of 2025, which could limit relief for home sales. In the rental market, expectations for rent growth have jumped sharply, anticipating a 2.0% to 2.5% increase this year, compared to 1.0% last year, reflecting ongoing affordability challenges for renters and buyers alike.
Consumers are becoming increasingly pessimistic about housing affordability, anticipating rising home prices, rents, and mortgage rates, which will challenge both renters and homeowners.
The decline in mortgage rate optimism is notable, dropping from 42% in December to 35% in January, as expectations shift towards rising mortgage rates among consumers.
The forecast for multifamily rents is set to rise between 2.0% and 2.5% this year, a significant increase from last year's estimated growth of just 1.0%.
Despite worries regarding mortgage rates and home prices, respondents show less concern about external factors like job losses affecting the housing market.
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