Consumers are more optimistic about the future of the housing market, but most still aren't confident about buying a house under current conditions, a recent survey found.

Many potential buyers have been priced out of the market for over two years as high interest rates gridlocked the housing market. Home buyers have gotten something of a reprieve in recen✱t weeks, 🐈as interest rates have fallen and prices have decreased. Optimism about market, however, hasn't risen in response.

According to a survey released Monday by Fannie Mae, only 17% of consumers said now is a good time to buy a home. That's unchanged from a month before and one percentage point lower than the same time last year.

“Despite significantly greater optimism that mortgage rates and home prices will move in a more favorable direction for potential homebuyers, most consumers remain apprehensive about the housing market and continue to point to the lack of affordability and supply as the chief reasons for their p💫essimism,”🐬 said Mark Palim, Fannie Mae vice president and deputy chief economist in the press release.

Interest Rates Are Falling

Many homeowners have been effectively locked in by their own low mortgage rates, making them reluctant to sell their homes. Home listing site Redfin recently found the majority of homeowners are paying borrowing costs that lower than the average 6.35% offered on a new 30-year, fixed-rate mortgage.

Average mortgage rates, however, have been on a downward trajecto💟ry since May and have decreased for the past three weeks.

As mortgage rates have fallen, it has encouraged more homeowners to list their houses. In August, the number of homes actively for sale grew for the tenth straight month to the highest level since May 2020, according to Realtor.com.

“The continued retreat of mortgage rates is welcome news, as it means buyers can afford more expensive homes on the same monthly budget and that more homes will come onto the market as sellers are willing to list their properties,” wrote Realtor.com's senior economist Joel Berner in a commentary.

Lower Rates Could Lead to Lower Prices

As more homes are put up🌼 for sale, prices could come dow💎n.

Because home buyers have been fighting for fewer homes on the market, competition has increased, driving home prices up. According to Realtor.com, the median home price has grown more than 36% from July 2019.

As supply a🍬nd demand come more into bala𝕴nce, that has started to ease. Realtor.com found that in August, the median price of homes for sale decreased by 1.3% compared to the same time last year.

The number of homes for sale that have cut their asking price has grown to the most for any August since 2018, the Realtor.com study found.

Potential Home Buyers Are Feeling Betꩵter About the Future—Whenever It Gets Here

Although consumers are not confident about the housing market now, more have indicated a belief that home prices will d🍰ecrease over the next year, according to♛ Fannie Mae.

Almost 40% of consu♔mers expect mortꦏgage rates to decline in the next year, up 10 percentage points from last month.

The number of people who reported thinking home prices will fall in the next year also increased, to 25% in August from July's 21%.