The Fannie Mae Home Purchase Sentiment Index (HPSI) increased slightly in July, as consumers’ increased confidence regarding their personal financial situations was largely offset by further pessimism toward homebuying conditions.
Three of the HPSI’s six components increased month over month, including the components measuring job security and home price expectations. However, 82% of consumers reported that it’s a “bad time to buy” a home, a new survey high and up from 78% in June. The full index is up 4.0 points year over year.
“It’s unlikely we’ll see housing sentiment catch up to other broader economic confidence measures until there is meaningful improvement to home purchase affordability,” says Doug Duncan, Fannie Mae senior vice president and chief economist.
“Homebuying sentiment once again matched its all-time low. Unsurprisingly, consumers continue to attribute the challenging conditions to high home prices and unfavorable mortgage rates. We have not seen much movement in the ‘good time to sell’ component over the last few months, an indication that the current low levels of existing homes for sale will likely continue to persist in the near term,” he adds.
Good/Bad Time to Buy: Percentage of respondents who say it is a good time to buy a home decreased from 22% to 18%. Those who say it is a bad time to buy increased from 78% to 82%.
Good/Bad Time to Sell: Percentage of respondents who say it is a good time to sell a home remained unchanged at 64%. Those who say it’s a bad time to sell remained unchanged at 36%.
Home Price Expectations: Percentage of respondents who say home prices will go up in the next 12 months increased from 36% to 41%. Those who say home prices will go down decreased from 26% to 24%. Those who think home prices will stay the same decreased from 37% to 34%.
Mortgage Rate Expectations: Percentage of respondents who say mortgage rates will go down in the next 12 months remained unchanged at 16%. Those who expect mortgage rates to go up decreased from 47% to 45%. Those who think mortgage rates will stay the same increased from 36% to 38%.
Job Loss Concern: Percentage of respondents who are not concerned about losing their job in the next 12 months increased from 77% to 80%. Those who are concerned decreased from 22% to 20%.
Household Income: Respondents who say their household income is significantly higher than it was 12 months ago remained unchanged at 19%. Those who say their household income is significantly lower remained unchanged at 10%. The percentage who say their household income is about the same remained unchanged at 71%.
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