Consumer confidence in the housing market regained ground lost to the COVID-19 crisis in June, boosting Fannie Mae’s Home Purchase Sentiment Index (HPSI) to a score of 76.5, an increase of nine points compared with May.
The share of survey respondents who said now is a good time to buy a home increased from 52% to 61%, while the percentage who said it is a bad time to buy decreased from 39% to 27%. As a result, the net share of Americans who said it is a good time to buy increased 21 percentage points.
The percentage of respondents who said it is a good time to sell a home increased from 32% to 41%, while the percentage who say it’s a bad time to sell decreased from 62% to 48%. As a result, the net share of those who said it is a good time to sell increased 23 percentage points.
The share of respondents who said home prices will increase in the next 12 months increased this month from 26% to 34%, while the percentage who said home prices will go down decreased from 35% to 25%. The share who think home prices will stay the same increased from 30% to 31%. As a result, the net share of Americans who say home prices will go up increased 18 percentage points.
The share of respondents who said mortgage rates will go down in the next 12 months decreased in June from 25% to 17%, while the percentage who said they expect mortgage rates to increase jumped from 25% to 32%. The share who said mortgage rates will stay the same decreased from 43% to 42%. As a result, the net share of Americans who said mortgage rates will go down over the next 12 months decreased 15 percentage points.
The percentage of respondents who said they are not concerned about losing their job in the next 12 months decreased from 75% to 74%, while the percentage who said they are concerned increased from 24% to 26%. As a result, the net share of Americans who said they are not concerned about losing their job decreased three percentage points.
The share who said their household income is significantly higher than it was 12 months ago increased from 18% to 25%, while the percentage who said their household income is significantly lower decreased from 19% to 16%. The percentage who said their household income is about the same decreased from 61% to 58%. As a result, the net share of those who said their household income is significantly higher than it was 12 months ago increased 10 percentage points.
“A second month of improvement in June allowed the HPSI to regain some of the sharp losses in optimism observed in March and April,” said Doug Duncan, senior vice president and chief economist for Fannie Mae, in a statement. “The share of renters who say it’s a good time to buy a home is now at its highest level in five years, suggesting favorable conditions for first-time home buying, consistent with the recent rebound in home purchase activity.
“Homeowners seem to have taken note of the resulting lack of housing supply, with an increased share saying it’s a good time to sell a home,” Duncan says. “However, this activity may cool again in the coming months, depending on the extent to which it can be attributed to consumers having chosen to delay or to accelerate home buying plans due to the pandemic.
“Survey respondents’ persistent, substantially elevated concerns about job security in the face of record unemployment remains a key takeaway, particularly among renters and homeowners with a mortgage,” he adds. “We believe the continuing uncertainty regarding the coronavirus’ containment suggests an uneven and potentially volatile course toward economic recovery.”
