The Fannie Mae Home Purchase Sentiment Index (HPSI) decreased in February by 1.2 points to 76.5, with four of the HPSI’s six components falling month over month: including, most notably, the home-buying conditions and household income components.
Offsetting much of that decline, however, was increased optimism regarding job security, with consumers reporting a significantly more positive view of the labor market compared to January.
Year over year, the HPSI is down 16.0 points.
“As we expected, the HPSI remained relatively flat in February, but underlying data indicate growing job-related optimism among consumers, especially among lower-income and renter groups,” says Doug Duncan, Fannie Mae’s senior vice president and chief economist.
“With the growing likelihood that lockdown restrictions will continue easing as vaccination efforts ramp up, and with warmer weather on the horizon and another round of fiscal stimulus pending, these two segments of consumers may have good reason to feel more positive about the labor market,” he adds.
“However, other components of the index remain well below pre-pandemic levels, so we believe there may still be room for improvement in housing and economic attitudes in the coming months, depending in part on the future path of mortgage rates,” Duncan remarks.
Good time to buy: The percentage of respondents who say it is a good time to buy a home decreased from 52% to 48%, while the percentage who say it is a bad time to buy increased from 37% to 43%.
Good time to sell: The percentage of respondents who say it is a good time to sell a home decreased from 57% to 55%, while the percentage who say it’s a bad time to sell increased from 33% to 35%.
Home prices: The percentage of respondents who say home prices will go up in the next 12 months increased from 41% to 47%, while the percentage who say home prices will go down increased from 17% to 18%. The share who think home prices will stay the same decreased from 34% to 29%.
Rates: The percentage of respondents who say mortgage rates will go down in the next 12 months decreased from 9% to 8%, while the percentage who expect mortgage rates to go up increased from 45% to 47%. The share who think mortgage rates will stay the same increased from 37% to 38%.
Job concerns: The percentage of respondents who say they are not concerned about losing their job in the next 12 months increased from 75% to 82%, while the percentage who say they are concerned decreased from 24% to 17%.
Income: The percentage of respondents who say their household income is significantly higher than it was 12 months ago decreased from 21% to 17%, while the percentage who say their household income is significantly lower increased from 14% to 19%. The percentage who say their household income is about the same decreased from 64% to 61%.