Fannie Mae’s Home Purchase Sentiment Index (HPSI) increased 2.1 percentage points in June to 88.3, matching the all-time high from February of this year, according to the government-sponsored enterprise (GSE).
The GSE says the rise can be attributed to increases in four of the six HPSI components. The net share who reported that now is a good time to sell a home reached a new record high, increasing an additional seven percentage points, outpacing the net three percentage point increase of Americans who reported that now is a good time to buy a home.
As a result, the net share who said it’s a good time to sell compared with those who said it’s a good time to buy widened once again this month, which continues to indicate a potential seller’s market. Americans also expressed greater belief that mortgage rates will go down over the next 12 months, with that component increasing three percentage points. Finally, the net share of consumers who believed home prices will go up increased by six percentage points this month, the HPSI shows.
“The June HPSI reading matches the previous record set in February and reflects the trend toward a seller’s market that respondents indicated last month,” says Doug Duncan, senior vice president and chief economist at Fannie Mae. “Consumers are also growing more optimistic about their ability to get a mortgage, and lenders expect credit standards to ease further going forward, as shown in our Mortgage Lender Sentiment Survey.”
Although this optimism is at an all-time high, Duncan says it is relative to the tight standards that had been put in place after the crisis, when the company began collecting National Housing Survey Data.
“Nevertheless, in the face of very tight housing supply, easing credit standards may fail to have the desired effect and could have the unintended consequence of fueling further house price increases,” he adds.
HPSI component highlights include the following:
- The HPSI is up 5.1 percentage points compared with the same time last year.
- The net share of Americans who said it is a good time to buy a home increased three percentage points to 30%.
- The net percentage of those who said it is a good time to sell increased by seven percentage points to 39%, rising to a new survey high for the second consecutive month.
- The net share of Americans who said that home prices will go up increased by six percentage points in June to 46% after declining in May.
- The net share of those who said mortgage rates will go down over the next 12 months rose three percentage points to -49%, following the trend from the last two months.
- The net share of Americans who said they are not concerned about losing their jobs fell five percentage points to 66%, declining further from last month.
- The net share of Americans who said their household incomes are significantly higher than they were 12 months ago fell one percentage point in June to 17%.