Respondents in Fannie Mae's monthly housing survey for July expressed increased reticence toward the housing market, with high home prices proving a challenge to both first-time buyers and sellers looking to trade up to another home. Although a large share of respondents said their household income has increased, there was also a sharp increase in the share of people who were concerned about losing their job.

Fannie Mae's Home Purchase Sentiment Index for July stood at 86.5, down 4.2 points from June and 0.3 points from July 2017. The index is based on six factors from the National Housing Survey, including whether respondents consider it a good time to buy or sell a home, expected changes to home prices and mortgage rates, perceived job security, and changes to household income.

"Home purchase sentiment seems to have reached a plateau, with potential home sellers likely struggling to find a home to buy amid slow supply growth, expectations for rising mortgage rates, and significant home price increases," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "Survey respondents cite 'high home prices' as the top reason why it is both a good time to sell a home and bad time to buy a home. This suggests a contributing factor to the low supply of existing homes for sale is that current owners are reluctant to trade up in a rising price market. Additionally, the shares of consumers citing favorable mortgage rates as a reason why it's a good time to buy or sell a home both dropped to fresh survey lows."

Fifty-eight percent of respondents considered it a good time to buy a home, down 1 percentage point from July 2017 but up 1 percentage point from June. The share of respondents considering it a bad time to sell stood at 34 percent, unchanged from the previous year but up 3 percentage points from June.

The share of respondents considering it a good time to sell a home remained high at 66 percent, a year-over-year increase of 8 percentage points, but this share was down 3 percentage points from June. One in four respondents thought it was a bad time to sell, down 5 percentage points from the previous year but up 3 percentage points from the previous month.

Fewer respondents said they expect home prices to continue climbing, with the net share dropping below 40 percent for the first time since December 2016. Forty-nine percent said they think prices will go up in the next 12 months, down 6 percentage points from June and 4 percentage points from July 2017. Ten percent of respondents said they think prices will go down, up from 9 percent in June and 6 percent in July 2017.

On average, respondents expected home prices to grow by 2.3 percent in the next 12 months. This was down from the average expectations of 2.6 percent in June and 3.7 percent in July 2017.

Sixty-five percent said they would buy a home if they were to move, unchanged from the previous year but down 3 percentage points from June. Fifty-seven percent said they thought it would be easy for them to get a mortgage, down 1 percentage point from the previous month but a year-over-year increase of 4 percentage points. Thirty-nine percent said they thought it would be difficult to get a mortgage, up 1 percentage point from the previous month but down 3 percentage points from the previous year.

Fifty-eight percent of respondents said they think mortgage rates will go up in the next 12 months, unchanged from the previous month but up 3 percentage points from July 2017. Six percent of respondents said they think rates will go down, the same share as the previous year and up from 5 percent in June.

Thirty percent said they would rent their next home if they moved, jumping 4 percentage points from June to match the share in the July 2017 survey. Sixty percent of respondents said they thought home rental prices would increase in the next 12 months, up 6 percentage points from the previous month and 3 percentage points from the previous year. Three percent of respondents said they believe rental prices will drop, matching last year's share and dropping from 4 percent in June.

On average, respondents said they thought rental prices would increase by 4.8 percent over the next 12 months. This was up from 4 percent in June, but roughly equal to the July 2017 expectation of a 4.9 percent increase.

Respondents showed more uncertainty about their employment, with 17 percent saying they were concerned about possibly losing their job in the next 12 months. This was up 5 percentage points from both the previous month and previous year. The share of respondents who were unconcerned about losing their job fell from 87 percent in July 2017 and 88 percent in June to 82 percent.

The net share of respondents reporting that their household income is significantly higher than 12 months ago stood at 21 percent, matching a survey high set in May. Thirty-one percent said their household income is higher, up from 27 percent in July 2017 and 28 percent in June. Ten percent said their household income has dropped significantly, up 1 percentage point from the previous month but down 1 percentage point from the previous year.

Fifty-one percent of respondents said they expect their personal financial situation to improve in the next 12 months, down 3 percentage points from June but a year-over-year increase of 5 percentage points. The share of respondents who expect their personal financial situation to worsen fell from 13 percent in July 2017 and 12 percent in June to 9 percent.

Fifty-five percent of respondents considered the U.S. economy to be on the right track, up 9 percentage points from the previous year and 2 percentage points from the previous month. Thirty-seven percent considered the economy to be on the wrong track, up 1 percentage point from June but down 2 percentage points from July 2017.

The National Housing Survey collects responses from approximately 1,000 Americans, who are interviewed via telephone and asked more than 100 questions to track attitudinal shifts on topics related to the housing market and economy. The survey has been issued monthly since June 2010.