Fannie Mae’s Home Purchase Sentiment Index (HPSI) increased 3.3 points in March to 61.3 but remains only slightly above its all-time low set late last year, the company says.
Overall, four of the HPSI’s six components increased month over month, most notably those associated with home-selling conditions and consumers’ sense of job security. While the former component remains slightly positive on net, in March, 40% of consumers reported that it’s a bad time to sell a home, down from 44% last month, and 21% expressed concern about losing their job in the next 12 months, down from 24% last month.
Year over year, the full index is down 11.9 points.
“With the spring homebuying season now upon us, a large majority of consumers continue to believe that it’s a bad time to buy a home,” says Mark Palim, Fannie Mae’s vice president and deputy chief economist. “Homeowners sharing this belief frequently cited ‘unfavorable mortgage rates’ as the primary reason for their pessimism, further corroborating the often-discussed disincentive – or ‘lock-in effect’ – that many mortgage holders who may be considering moving have toward giving up their lower rates. By contrast, surveyed renters once again indicated that high home prices are their primary concern for buying a home.”
Among the HPSI component highlights:
Good/Bad Time to Buy: The percentage of respondents who say it is a good time to buy a home remained unchanged at 20%, while the percentage who say it is a bad time to buy remained unchanged at 79%.
Good/Bad Time to Sell: The percentage of respondents who say it is a good time to sell a home increased from 54% to 58%, while the percentage who say it’s a bad time to sell decreased from 44% to 40%.
Home Price Expectations: The percentage of respondents who say home prices will go up in the next 12 months increased from 30% to 32%, while the percentage who say home prices will go down decreased from 35% to 31%.
Mortgage Rate Expectations: The percentage of respondents who say mortgage rates will go down in the next 12 months decreased from 15% to 12%, while the percentage who expect mortgage rates to go up decreased from 55% to 51%. The share who think mortgage rates will stay the same increased from 28% to 34%.
Job Loss Concern: The percentage of respondents who say they are not concerned about losing their job in the next 12 months increased from 73% to 78%, while the percentage who say they are concerned decreased from 24% to 21%.
Household Income: The percentage of respondents who say their household income is significantly higher than it was 12 months ago decreased from 22% to 20%, while the percentage who say their household income is significantly lower decreased from 12% to 11%. The percentage who say their household income is about the same increased from 63% to 68%.
