With affordability weighing on would-be homebuyers, Fannie Mae’s Home Purchase Sentiment Index (HPSI) came in at a reading of 65.6 in May, down 1.2 points month over month and down 2.6 points year over year.

Four of the six component indices of the HPSI, which are based on responses to specific questions asked during the agency’s national housing survey, decreased on a monthly basis. Most notably, the component that asks participants whether or not it’s currently a good time to buy saw a substantial decline. The percentage of poll respondents who said it’s a good time to buy fell from 23% to 19%, while the share of those who think it’s a bad time to buy grew from 77% to 80%, resulting in a net decrease of 7 percentage points.

Meanwhile, consumers increasingly view the housing market as favorable to sellers. The percentage of respondents saying it’s a good time to sell was up from 62% to 65% month over month, while those who believe it’s a bad time to sell went down from 38% to 34%. As a result, the net share of those who say it’s a good time to sell was down 8 percentage points.

The “good time to sell” component index is now at its highest level since July 2022, while the “good time to buy” component is once again hovering near its record low.

“As we near the end of the spring homebuying season, the latest HPSI results indicate that affordability hurdles, including high home prices and mortgage rates, remain top of mind for consumers, most of whom continue to tell us that it’s a bad time to buy a home but a good time to sell one,” said Mark Palim, Fannie Mae’s vice president and deputy chief economist.

Poll respondents also indicated that they don’t anticipate affordability to improve in the short term. Significant majorities of survey participants believe that both home prices and mortgage rates will either increase or remain the same in the next 12 months.

“Notably, the same factors impacting affordability may also be affecting the perceived ease of getting a mortgage,” Palim said. “This was particularly true among renters: 81% believe it would be difficult to get a mortgage today, matching a survey high.”