Fannie Mae’s Home Purchase Sentiment Index (HPSI) increased 3.3 points in August to 77.5, recovering after falling slightly in July and continuing the rebound from May and June. The HPSI is down 16.3 points compared to the same time last year.
Five of the six HPSI components increased month over month, with consumers reporting a more optimistic view of both home-buying and home-selling conditions, but a slightly more pessimistic view of expected home price growth. Year over year, the HPSI is down 16.3 points.
“The HPSI’s recovery was driven by near-record low mortgage rates that helped restore much of consumers’ positivity on whether it is a good time to buy a home, while also improving the good-time-to-sell sentiment,” says Doug Duncan, Fannie Mae’s senior vice president and chief economist. “The August survey was conducted as consumers continue to face uncertainty regarding schools’ and businesses’ reopening plans and as the CARES Act $600-per-week income supplement expired.”
The percentage of respondents who say it is a good time to buy a home increased from 53% to 59%, while the percentage who say it is a bad time to buy decreased from 38% to 35%. As a result, the net share of Americans who say it is a good time to buy increased nine percentage points.
The percentage of respondents who say it is a good time to sell a home increased from 45% to 48%, while the percentage who say it’s a bad time to sell remained decreased from 48% to 44%. As a result, the net share of those who say it is a good time to sell increased seven percentage points.
Thirty-three percent of respondents say home prices will go up in the next 12 months, which is down two percentage points from July. The percentage who said home prices will go down increased from 23% to 26%. The share who think home prices will stay the same was unchanged at 34%.
The percentage of respondents who say mortgage rates will go down in the next 12 months increased this month from 16% to 17%, while the percentage who expect mortgage rates to go up decreased from 35% to 33%. The share who think mortgage rates will stay the same increased from 42% to 45%. As a result, the net share of Americans who say mortgage rates will go down over the next 12 months increased three percentage points.
The vast majority of respondents (78%) say they are not concerned about losing their job in the next 12 months, and the percentage of respondents who say their household income is significantly higher than it was 12 months ago increased from 22% to 25%.
For more insights from the HPSI, click here.