CNBC — The economic free fall from Covid-19 is taking its toll on what had been very strong housing demand and sentiment just a few months ago.

After falling sharply in March, housing confidence among consumers took an even deeper dive in April, according to the Fannie Mae Home Purchase Sentiment Index. It was the lowest level since November 2011. Back then, the market was reeling from the subprime mortgage crisis, with home prices cratering and foreclosures rampant.

Consumers suddenly have a much more pessimistic view of buying and selling conditions. In addition, more consumers said their household income is now significantly lower than it was a year ago.

“Individuals’ heightened uncertainty about job security, as registered in the survey over the last two months, is likely weighing on prospective homebuyers, who may be more wary of the substantial, long-term financial commitment of a mortgage,” said Doug Duncan, chief economist at Fannie Mae.

This comes even as interest rates are hovering near record lows. And that is helping to keep buyer sentiment slightly ahead of seller sentiment: 46% of those surveyed said it was a bad time to buy a home, while 65% said it’s a bad time to sell a home.

“We expect that the much steeper decline in selling sentiment relative to buying sentiment will soften downward pressure on home prices,” added Duncan.

On average, consumers said they expect home prices to fall 2% over the next 12 months, the lowest expected growth rate in the survey’s history, which dates to 2010.

Home sales have already fallen sharply, and active listings were down 15% annually in April, according to Sellers also pulled their homes from the market, as social distancing measures went into place.

Signs of a rebound?

The numbers are expected to get worse in May, but there is still some demand in the market. Agents in states that are starting to reopen are hosting open houses again, and online searches are rising.

Three in 4 potential sellers said they are preparing to sell their homes following the end of stay-at-home orders, according to a new survey from the National Association of Realtors.

“After a pause, home sellers are gearing up to list their properties with the reopening of the economy,” said Lawrence Yun, NAR’s chief economist. “Plenty of buyers also appear ready to take advantage of record-low mortgage rates and the stability that comes with these locked-in monthly payments into future years.”

Homebuying and selling will likely vary dramatically by location, as some harder-hit areas stay closed while others reopen. Sales will still be limited by the tight supply of homes for sale. Even before the pandemic struck, the market was incredibly lean.

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