Consumer Confidence in Housing Market Held Strong in February

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Consumer confidence in the housing market remained near its all-time high in February but is expected to drop in March due to volatility in the stock market caused by the spread of coronavirus, according to Fannie Mae’s Home Purchase Sentiment Index (HPSI).

The share of survey respondents who said it is a good time to buy a home was 59%, flat compared with January. The share who said it is a bad time to buy was 32%, up from 31% the previous month. As a result, the net share of Americans who said it is a good time to buy decreased two percentage points.

The share who said it is a good time to sell was 67%, up from 66%, while the share who said it’s a bad time to sell was 22%, up from 21%. As a result, the net share of those who say it is a good time to sell was flat compared with January.

The percentage of Americans who said home prices will go up in the next 12 months was 47%, down from 48% the previous month, while the share who said home prices will go down was 8%, up from 7%. The share who said home prices will stay the same remained unchanged at 38%. As a result, the net share of Americans who said home prices will go up decreased two percentage points.

The share who said mortgage rates will go down in the next 12 months was 8%, up from 7% in Janaury, while the share who expect rates to go up was 38%, up from 33%. The share who said mortgage rates will stay the same was 46%, down from 48%. As a result, the net share of Americans who said mortgage rates will go down over the next 12 months fell four percentage points.

The share of survey respondents who said they are not concerned about losing their job in the next 12 months was 85%, down from 86% the previous month. The share who said they are concerned was 13%, down from 14%. As a result, the net share of Americans who said they are not concerned about losing their job remained unchanged.

Lastly, the share of Americans who said their household income is significantly higher than it was 12 months ago was 32%, up from 27%, while the share who said their household income is significantly lower remained the same at 11%. The percentage who said their household income is about the same was 56%, down from 61%. As a result, the net share of those who said their household income is significantly higher than it was 12 months ago increased five percentage points.

“The HPSI remained relatively steady in February, reflecting another month of robust consumer sentiment consistent with strong housing market data to start the year,” said Doug Duncan, senior vice president and chief economist for Fannie Mae, in a release. “In particular, household income sentiment picked back up as more workers saw their wages rise amid tight labor market conditions, helping bolster already strong housing demand.”

Duncan adds, however, that “the potential economic impact of the coronavirus” could result in “some volatility in sentiment in the months ahead.”

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