Bulletin Board Magazine 2022 Volume 2

Seller Sentiment Bounces Back

Meanwhile, the net share of respondents who say their household income is significantly higher than it was 12 months ago decreased by 2 percentage points month over month as inflation begins to eat away at household budgets and real income growth. What This Means for Housing This Season Consumers are still struggling with an affordability crunch as they juggle rising home prices, interest rates, and inflation outpacing income growth. While the housing market is showing signs of moderation through growing inventory and also an increase in price reductions, listing price growth overall remains sticky as sellers take time to adjust to market conditions. Home sales are expected to continue to moderate compared to last year’s historic pace. However, a pull-back in feverish demand and adjustment in seller expectations could start to tip the market back toward a more balanced state toward the end of the year. Homebuyers who are still hanging in there may find better options later in the year in what is typically considered the best time to buy.

According to the survey, the share of respondents saying it is a good time to sell outnumbered those saying it is a bad time by four-to-one in May. The net share of respondents saying now is a good time to sell increased by 6 percentage points compared to the previous month. In other words, consumers largely agree that the current housing market favors home sellers. These findings align with Realtor.com inventory data showing that homeowners may be acting on these conditions. Year-over-year inventory growth for the first time since mid-2019, with newly listed homes rising by 6.3% on a year-over-year basis. However, it is important to note that many sellers are themselves buyers, some of whom are locked-in to lower mortgage rates on their current home or are having trouble finding a new home amid still-low home inventory. Sentiment Toward Employment and Future Income Declines In general, consumers have a positive view of the current labor market, but the survey results reveal that this month’s reading was less optimistic than in recent months. The number of respondents saying they are not concerned about losing their job in the next year outnumbered those saying that they are concerned by more than five-to one. However, the net share who say they are not concerned about losing their job has decreased by 8 percentage points over last month. While employment rose by 390,000 and the unemployment rate remained at an unchanged low 3.6% rate in May, these survey numbers could reflect consumer concerns that the labor market will lose momentum later in the year, especially in light of the Federal Reserve’s planned tightening. Nonetheless, the Fed’s plan suggests they believe the labor market can withstand a couple more rate hikes to help tame inflation.

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