Fannie Mae's index measuring confidence in the housing market dropped in December after a slight uptick in the previous month. The decrease was primarily due to an increase in the number of people who did not consider it a good time to buy a home.

The Home Purchase Sentiment Index, which is calculated based on six factors from Fannie Mae's monthly National Housing Survey, stood at 83.5 at the end of 2018. This was down 2.7 points from November and 2.3 points from December 2017.

A net share of 11 percent of respondents to December's survey considered it a good time to buy a home, down 12 points from the previous month and 13 points from the previous year to reach a survey low. Respondents were slightly more likely to consider it a good time to sell a home, although a smaller share said they expect home prices to go up in the next 12 months.

"Although home price growth slowed in 2018, the cumulative impact of sustained, robust increases in home prices outpacing income growth likely helped drive the share of consumers citing high home prices as a primary reason for a bad time to buy a home to a survey high," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "Meanwhile, consumers' views on the direction of the economy, a key support for housing market sentiment of late, has softened somewhat from its October high. Looking ahead, consumers expect the pace of home price growth to slow over the course of 2019, which may temper growing concern over housing affordability."

Fifty-two percent of respondents in December's survey said they thought it was a good time to buy a home, down 5 points from November and 6 points from December 2017. Forty-one percent said they thought it was a bad time to buy a home, up 7 points from both the previous month and previous year.

Fifty-five percent said they thought it would be easy to get a mortgage, down 2 points from November but a year-over-year increase of 3 points. Forty-three percent said they thought it would be difficult, up 3 points from November but down 1 point from the previous year.

Sixty-six percent said they would buy their next home if they were to move, down 2 points from the previous month and 3 points from the previous year. The share of respondents saying they would rent their next home climbed from 27 percent in December 2018 and 28 percent in November to 29 percent.

Sixty-one percent said they thought mortgage rates will go up in the next 12 months, up 1 point from the previous month and a year-over-year increase of 5 points. Five percent said they think rates will drop, up from 4 percent in the previous month and previous year.

Attitudes toward selling a home remained positive, with 64 percent saying they thought it was a good time to do so. This was up 1 point from November and 2 points from December 2017. The share of respondents considering it a bad time to sell held at 28 percent.

Fewer respondents say they expect home prices to increase in the next 12 months, with this share falling from 50 percent in December 2017 and 46 percent in November to 45 percent. Fourteen percent said they think home prices will go down, up from 13 percent in November and more than double the share of 6 percent in December 2017.

On average, respondents said they expect home prices to go up by 2.3 percent over the next 12 months. This was down from expectations of 3.3 percent in the previous year and 2.5 percent in the previous month.

Fifty-eight percent said they think home rental prices will go up in the next 12 months, down from 60 percent in November and 61 percent in December 2017. Three percent said they think prices will go down, down 1 point from the previous month but up 2 points from the previous year. On average, respondents said they think home rental prices will go up by 4.7 percent over the next 12 months – up from 4.4 percent in November but down from 5.2 percent in December 2017.

Eighty-nine percent said they weren't worried about losing their job in the next 12 months, up 1 point from the previous month and 6 points from the previous year. Ten percent said they were worried about a job loss, down from 11 percent in November and 15 percent in December 2017.

Thirty-one percent said their household income is significantly higher than it was 12 months ago, down from 32 percent in November but up from 26 percent in December 2017. Twelve percent said their household income is significantly lower, up 4 points from the previous month and 2 points from the previous year.

Fewer respondents expected their personal financial situation to improve in the next 12 months, with 48 percent holding this view – down 3 points from November and 1 point from December 2017. Twelve percent said they think their financial situation will worsen, up 2 points from the previous month and 1 point from the previous year.

Respondents were also expressing less optimism about the economy, with 50 percent saying they thought the economy was on the right track – down 9 points from a high point in October, 3 points below the previous month, and 2 points below the previous year. Forty percent said they thought the economy was on the wrong track, up from 33 percent in October and 37 percent in November; however, this was still a year-over-year drop of 1 point.

The National Housing Survey, which has been issued since June 2010, polls approximately 1,000 American adults each month. Respondents are interviewed via telephone and asked more than 100 questions to gauge perceptions toward the housing market and economy.