View the volume on your real estate success at Inman on Tour: Nashville! Make contact with Prailblazers in the sector and top speakers to get powerful insights, advanced strategies and invaluable connections. Increase your company and achieve your braviest goals – all with Music City Magic. Register now.
Consumers are again worried about inflation, with a growing number of convinced that house prices, rental prices and mortgage interest are led in the coming year, suggest surveys by Fannie Mae and the University of Michigan on Friday.
The inflation expectations increased after President Donald Trump announced on January 31 that he intended to impose rates on goods from China, Canada and Mexico, the University of Michigan Surveys from consumers found.
Joanne HSU
“The consumer transmission fell for the second consecutive month and fell around 5 percent to reach the lowest reading since July 2024,” said research director Joanne HSU in a statement on Friday. “The decrease was omnipresent, with republicans, independent and democrats who are all placed, from January, together with consumers in age and power groups.”
Although a rate of 10 percent came into effect on Chinese goods on Tuesday, the administration stated proposed 25 percent rates On goods from Canada and Mexico for 30 days.
The National Association of Home Builders has warned that more than 70 percent of the imported softwood wood and plaster used for plasterboard comes from Canada and Mexico, and that house builders are confronted.
Fannie Mae’s monthly National Housing Survey – who was packed on January 21, before the proposed rates were announced – also discovered that consumers are worried that inflation will make the affordability of homes worse.
Kim Betancourt
“Consumers increasingly seem to be pessimistic that the affordability of homes will improve across the board, because a growing share expects house prices, rental prices and mortgage interest to all rise,” said Fannie Mae -researcher Kim Betancourt in a rack Friday.
All five components of the Index of Michigan of the Consumer Tertiment University fell, which fell 4.6 percent from January and 11.8 percent compared to a year ago, to 67.8.
The expectations of consumer inflation increase at rate
Source: Surveys from the University of Michigan of consumers.
“Year-Ahead inflation expectations rose from 3.3 percent from last month to 4.3 percent this month, the highest reading since November 2023 and marking two consecutive months of unusually large increases,” HSU said. “This is only the fifth time in 14 years that we have seen such a large increase of one month (one percentage point or more) in the expectations of the year Ahead inflation expectations.”
Although the consumer transmission fell from January to February from both Republicans and Democrats, there has been a “dramatic part -time split” since the elections “in general confidence, in which Democrats are more pessimistic than Republicans, said Pantheon Macro -economy senior American economist Oliver Allen.
Oliver Allen
“Politically driven fluctuations in sentiment are usually poorly correlated with expenditure decisions, although confidence among independent has also fallen considerably since December,” Allen said in a note to customers on Friday.
The University of Michigan investigated consumers from January 21 to February 3 and Trump announced the 30-day break about the rates about Mexico and Canada Leave on the last day of the research window, Allen noted.
“We think that consumers’ expenditures will be stimulated in the short term by preventive purchases, because consumers are trying to lead the higher prices that they fear will bring rates,” all said.
Fannie Mae’s National Housing Survey generated a slight increase in the home purchase sentiment index (HPSI) of the mortgage giant.
That is partly because the HPSI – which distils six questions from the survey into a single number – deals with the expectations of the consumer that house prices will rise as positive in the coming 12 months. Expectations that house prices will rise means that consumers are not worried that the prices are about to deposit, which is a sign of trust in housing markets.
Source: Fannie Mae National Housing SurveyJanuary 2025.
But the run -up to house prices during the Pandemie has already priced many so -called home buyers from the market. Millions of Americans would welcome a housing market crash, a lending survey that was found last fall.
The National Housing Survey of Fannie Mae, who reached 1,055 financial decision makers from households between January 2 and January 21, discovered that 43 percent of Americans thought house prices would continue to rise in the coming 12 months, an increase of 38 percent in December.
Fannie Mae -economists estimate last month that national house prices increased by 5.8 percent in 2024 and predict that they will increase 3.5 percent in 2025. But as the appreciation of the house price consumes, the prices are expected to fall in some markets – and all.
Among the 50 largest American housing markets include markets that fall the annual falls of the annual house price in 2024 Austin, Texas (-2.9 percent); Tampa, Florida (-2 percent); San Antonio, Texas (-1.5 percent) and Jacksonville, Florida (-1.1 percent), according to the Ice MortGage Monitor report for February.
Eight of the nine largest markets in Florida saw the price decrease last year, with Miami the only exception, the authors of the report noted.
“Given slower migration to the state, rising insurance costs and growing stocks for sale, house prices in the Sunshine State will be worth taking a good look if we make our way until 2025,” the report said.
The Ice MortGage Monitor identified 18 of the 20 strongest housing markets for price rating as being in “Inventory-called” parts of the midwest and the northeast.
“On the rental side, consumers have indicated a rapidly growing expectation in the past two months that rental prices will rise,” said Betancourt.
The share of consumers who said they expect the rental prices to rise from home increased by 8 percentage points from December to January to 65 percent. The proportion of consumers that they would buy a house if they had to move by 3 percentage points to 68 percent.
“Although it remains relatively cheaper for consumers than to buy in almost every American metro, we expect that affordability problems will remain a real challenge for both tenants and homeowners for the near future,” said Betancourt.
Source: Fannie Mae National Housing Survey, January 2025.
Increased mortgage interest has been added to affordability problems. Not only are potential home buyers who look at higher monthly payments, but many homeowners feel locked up for the low rate for their existing mortgage and are reluctant to sell.
After reaching a 2024 depot of 6.03 percent on September 17, the rates climbed at 30-year fixed rates conforming mortgages in January for the first time since May 2024 above 7 percent Optimum blue.
The economists of the mortgage industry expect rates for home loans to remain raised for the rest of this year, and that the chance is little that the sale of existing houses will bounce this year back after reaching the lowest level in 30 years in 2024.
“The lower optimism compared to the outlook of the mortgage interest rate was largely expected, because the rates have remained increased and even the 7 percent threshold were crossed in mid-January,” said Betancourt. “As noted in our last prediction, we currently expect that the Mortgage Interest 2025 will end around 6.5 percent, relatively little changed from where we are today, which will probably continue to hinder the affordability of housing and sales.”
Source: Fannie Mae National Housing SurveyJanuary 2025.
High house prices and the lack of inventory in many markets, in combination with increased mortgage interest rate, led 78 percent of Americans in January by Fannie Mae to say that it was a bad time to buy a house.
That was unchanged compared to December, but a year ago against 83 percent and an all-time high in survey records from 2010 of 86 percent registered in May 2024.
Source: Fannie Mae National Housing SurveyJanuary 2025.
Most Americans (63 percent) said that January was a good time to sell a house, unchanged compared to December and an increase of 3 percentage points from a year ago. In April, 67 percent of the respondents said it was a good time to buy a house.
Source: Fannie Mae National Housing SurveyJanuary 2025.
Fannie Mae’s Home Purchase Sentiment Index (HPSI) rose by 0.3 points in January to 73.4. The HPSI is 2.7 points higher compared to the same time last year.
Although there was little improvement in the HPSI from December to January, the outlook of the mortgage interest rate was the only one to place six kept factors that deteriorated.
Get Inman’s mortgage letter newsletter that is delivered directly for your inbox. A weekly curve of all the biggest news in the world of mortgages and closures that are delivered every Wednesday. Click here to subscribe.
E -Mail Matt Carter
