Consumer sentiment toward the housing market improved slightly in August, rising 1.5 points to score of 88.0 on Fannie Mae’s Home Purchase Sentiment Index (HPSI).
Interestingly, the increase in the survey score has more to do with the strength of the job market than it does the housing market.
The net share of Americans who said they were not concerned about losing their job rose 15 percentage points in August to 80%. This follows July’s 11 percentage point decline and represents a new survey high.
In addition, the net share of survey respondents who said their household income was significantly higher in August than it was 12 months earlier rose one percentage point to 22% – a new survey high for the second consecutive month.
But when it comes to the housing market itself, consumer views were not as rosy. The net share of Americans who said it was a good time to buy a home fell three percentage points compared with July, slipping to 21%.
The net share of survey respondents who said it was a good time to sell a home also fell three percentage points to 38%.
The net share who said home prices would go up over the next year fell one percentage point to 38%, remaining below 40% for two consecutive months for the first time since December 2016.
Also, the net share who said mortgage rates would go down over the next 12 months remained unchanged at -52%.
“Consumers are attuned to the divergence between the slowing housing market and strong macro economy,” said Doug Duncan, senior vice president and chief economist at Fannie Mae, in a release. “Consumers were less optimistic this month about both home buying and home selling conditions, while perceptions of income growth and confidence about job security are at survey highs.
“After years of robust home price growth outpacing income growth, consumers face significant housing affordability challenges at the low end of the market,” Duncan adds.
