Consumer sentiment toward the housing market improved in July, reaching a score of 93.7 on Fannie Mae’s Home Purchase Sentiment Index (HPSI).
That’s an increase of 2.2% compared with June and up 7.2% compared with July 2018.
Pushing up the overall score was an increase in the “Confidence About Not Losing Job” component. The net share of Americans surveyed for the report who said they are not concerned about losing their job over the next 12 months increased eight percentage points to 81%. This component is up 16 percentage points from the same time last year.
Falling mortgage rates have also had a positive impact on consumer sentiment toward housing. The share of Americans who said mortgage rates would go down over the next 12 months increased one percentage point in July compared with June. This component is up 24 percentage points from the same time last year.
“Consumer job confidence and favorable mortgage rate expectations lifted the HPSI to a new survey high in July, despite ongoing housing supply and affordability challenges,” says Doug Duncan, senior vice president and chief economist for Fannie Mae, in a statement. “Consumers appear to have shaken off a winter slump in sentiment amid strong income gains. Therefore, sentiment is positioned to take advantage of any supply that comes to market, particularly in the affordable category.
“However, recent financial market events following when the survey data were collected could weigh on consumer views looking ahead,” Duncan adds.
The net share of Americans who said it is a good time to buy a home increased three percentage points to 26%. This component is up two percentage points from the same time last year.
The net share who said it is a good time to sell a home increased one percentage point to 44%. This component is up three percentage points from the same time last year.
The share of those who said home prices will go up over the next 12 months decreased one percentage point to 37%. This component is down two percentage points from the same time last year.
The share who reported that their household income is significantly higher than it was 12 months ago increased one percentage point to 21%. This component is unchanged from the same time last year.