With the coronavirus pandemic bringing the U.S., and much of the world, to a screeching halt, only just over half of Americans think it’s still a good time to sell a home.
Only 52% of homeowners believe it’s still an opportune moment to put their place on the market—a steep month-over-month net decrease of 29 percentage points in March, according to Fannie Mae’s monthly Home Purchase Sentiment Index. The index measures buyer and seller attitudes about the housing market.
Meanwhile, the net share of Americans who think it’s a good time to buy a home, 56%, is down 7 percentage points from February to March.
“This is the tip of the iceberg,” says Javier Vivas, realtor.com®’s director of economic research. “We have yet to see the full extent of the impact of the virus on housing.”
The index is based on answers to a Fannie Mae housing survey of about 1,000 Americans conducted between March 1 and March 22. The bulk of the answers were within the first two weeks of the month, before the crisis took hold in America. Participants were asked about their attitudes on owning and renting homes, homeownership distress, the economy, household finances, and consumer confidence.
Sellers surveyed were worried because social distancing and public health concerns have made it impossible—or at least inadvisable—to hold open houses and showings for the foreseeable future. They’re concerned that they won’t attract buyers with so many folks unable to view the homes in person or because potential buyers may have been laid off or are nervous about the security of their jobs.
“The virus and the restrictions [on showings] will definitely put a dent in [the housing] supply,” says Vivas.
The coronavirus pandemic—and economic fallout—led to a record 11.7-point one-month drop in consumer optimism toward owning a home in March, according to Fannie Mae’s monthly index. It was down 9 points from a year earlier. The index fell to 80.8, the lowest it’s been since December 2016.
“Attitudes about the current home-selling environment deteriorated markedly,” Fannie Mae’s Chief Economist Doug Duncan said in a statement. “We expect [the COVID-19 pandemic] to weigh heavily on housing activity during the Spring/Summer home buying season.”
More Americans also believe home prices and mortgage rates will fall as the crisis carries on, according to Fannie Mae. About 8% of folks said prices will fall in February—compared with 22% in March.
“It’s normal for people to expect some decline in home values when the economy takes a hit,” says Vivas.
But folks shouldn’t panic or expect prices to fall to bargain-basement levels like they did around the Great Recession.
“Nationally, we should expect [price] deceleration and very slight declines in the near term. But [it won’t be] like we saw 10 years ago,” says Vivas.