Consumer confidence in the housing market increased November, rising to a score 91.5 on Fannie Mae’s Home Purchase Sentiment Index (HPSI).
That’s an increase of 2.7 points compared with October.
The increase reverses the decrease seen the previous month and brings the survey almost back to its all-time high set in August.
The percentage of survey respondents who said now is a good time to buy a home increased to 61%, up from 57% in October, while the percentage who said now is a good time to sell decreased slightly to 66%, down from 67%.
The percentage of respondents who said they expect home prices to increase in the next 12 months increased to 44%, up from 41% the previous month, while the percentage who said they expect home prices to decrease fell to 10%, down from 14%.
The percentage of Americans who said mortgage rates will decrease in the next 12 months fell to 11%, down from 12%, while the percentage who said mortgage rates will increase jumped to 39%, up from 37%.
The share who said mortgage rates will stay the same decreased to 42%, down from 44%.
The share who said they are not concerned about losing their job in the next 12 months remained flat at 86%.
The share who said their household income is significantly higher than it was 12 months ago remained the same at 28%.
“Over the past year, a growing share of consumers say that they expect mortgage rates to remain steady,” says Doug Duncan, senior vice president and chief economist for Fannie Mae, in a statement. “While low rates have helped boost housing affordability compared to last year, the HPSI has increased only moderately in that timeframe. This may be due in part to the ongoing challenge of tight housing supply, especially in the starter home market.
“That lean supply means the recent mortgage rate decline – holding payment size constant – allows borrowers to increase bid prices for homes,” Duncan adds. “As a result, home prices are propelled higher, mitigating the benefit of lower borrowing costs for many borrowers. Additionally, a rising savings rate suggests that consumers could be growing more financially conservative. Looking ahead, we continue to expect a steady but modest pace of growth in home purchase activity.”