Fannie Mae says its Home Purchase Sentiment Index (HPSI) increased for the third consecutive month in January but still remains well below its pre-pandemic highs.
Overall, the HPSI rose 0.6 points to 61.6, with three of the index’s six components increasing month over month, including those associated with home-selling conditions, home price outlook and household income.
Only 17% of respondents believe it’s a good time to buy, likely owing to the ongoing affordability challenges posed by elevated mortgage rates and home prices.
Year over year, the full index is down 10.2 points.
“January’s HPSI results showed that consumer sentiment toward the housing market remains subdued by historical standards,” says Doug Duncan, Fannie Mae’s senior vice president and chief economist. “For consumers, the same affordability issues are persisting, as they continue to indicate that high home prices and high mortgage rates make it a ‘bad time to buy’ a home.”
Good/Bad Time to Buy: The percentage of respondents who say it is a good time to buy a home decreased from 21% to 17%, while the percentage who say it is a bad time to buy increased from 76% to 82%.
Good/Bad Time to Sell: The percentage of respondents who say it is a good time to sell a home increased from 51% to 59%, while the percentage who say it’s a bad time to sell decreased from 42% to 39%.
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 remained unchanged at 37%. The share who think home prices will stay the same increased from 29% to 30%.
Mortgage Rate Expectations: The percentage of respondents who say mortgage rates will go down in the next 12 months decreased from 14% to 13%, while the percentage who expect mortgage rates to go up increased from 51% to 52%. The share who think mortgage rates will stay the same remained increased from 31% to 33%.
Job Loss Concern: The percentage of respondents who say they are not concerned about losing their job in the next 12 months remained unchanged at 82%, while the percentage who say they are concerned increased from 17% to 18%.
Household Income: The percentage of respondents who say their household income is significantly higher than it was 12 months ago decreased from 25% to 22%, while the percentage who say their household income is significantly lower decreased from 15% to 10%. The percentage who say their household income is about the same increased from 59% to 67%.
