Fannie Mae says its Home Purchase Sentiment Index (HPSI) increased 4.5 points in May to 67.5, up slightly after nearing its all-time survey low in April.
Four of the six HPSI components increased month over month, with consumers reporting a somewhat more optimistic view of home buying conditions and, to a lesser extent, home-selling conditions. Moreover, fewer consumers reported expectations that mortgage rates will go up over the next 12 months.
Year over year, the HPSI is down 24.5 points.
“Although the HPSI’s precipitous declines of March and April did not continue in May, Americans’ financial, economic, and housing market concerns remain substantially elevated compared to survey history,” says Doug Duncan, senior vice president and chief economist.
“Low mortgage rates have helped cushion some of the impact of the pandemic on consumer sentiment regarding whether it’s a good time to buy a home, which picked back up this month to late-2018 levels,” he adds. “Although weakened income perceptions and continuing job loss concerns, particularly among renters, are likely weighing on many would-be buyers, purchase mortgage applications have returned to mid-March levels when pandemic response measures began ramping up.”
The percentage of Americans who say it is a good time to buy a home increased from 48% to 52%, while the percentage who say it is a bad time to buy decreased from 46% to 39%. Meanwhile, the percentage who say it is a good time to sell a home increased from 29% to 32%, while the percentage who say it’s a bad time to sell decreased from 65% to 62%.
The percentage of Americans who say home prices will go up in the next 12 months increased from 23% to 26%, while the percentage who said home prices will go down increased from 34% to 35%. The share who think home prices will stay the same decreased from 36% to 30%.
The percentage of Americans who say mortgage rates will go down in the next 12 months increased this month from 23% to 25%, while the percentage who expect mortgage rates to go up decreased from 33% to 25%. The share who think mortgage rates will stay the same increased from 35% to 43%.
Photo: Doug Duncan