March Saw Consumers More Confident in Housing Market

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After decreasing slightly in February, consumer confidence in the housing market jumped in March, rising 5.5 points to a score of 89.8 on Fannie Mae’s Home Purchase Sentiment Index.

Twenty-two percent of survey respondents said it was a good time to buy a home, an increase of seven percentage points compared with February but down 10 percentage points compared with March 2018.

Forty-three percent said it was a good time to sell a home, an increase of 13 percentage points compared with February and an increase four percentage points compared with March 2018.

Thirty-eight percent of respondents said home prices will go up over the next 12 months, an increase of five percentage points compared with the previous month but down four percentage points compared with the same time last year.

The net share who said mortgage rates would go down over the next 12 months increased seven percentage points compared with February and was also up seven percentage points compared with March 2018.

Eighty percent of respondents said they are not concerned about losing their job, a decrease of one percentage point compared with the previous month but up nine percentage points from a year earlier.

Twenty percent reported that their household income was significantly higher than it was 12 months earlier, an increase of two percentage points compared with February and an increase of three percentage points compared with March 2018.

“A brighter housing market outlook drove this month’s increase in the HPSI – a welcome sign from consumers as we enter the spring and summer home buying seasons,” says Doug Duncan, senior vice president and chief economist at Fannie Mae, in a release. “The results further corroborate the positive effect of falling mortgage rates on affordability, which we expect will help support a rebound in home sales.

“Continuing a five-month trend, the net share of consumers who believe mortgage rates will go down increased seven percentage points amid a 35 basis-point drop in mortgage rates in March alone,” Duncan says. “Meanwhile, job confidence – little changed from last month’s survey high – also continues to support housing sentiment, while income growth perceptions firmed from both prior month and year-ago levels, potentially supporting an uptick in housing demand.

“Additionally, consumers appear to have regained some confidence in the housing market, with perceptions of both home buying and home selling conditions returning to their longer-term trends,” he adds.

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