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The Fannie Mae Home Purchase Sentiment Index® (HPSI) fell 2.0 points in July to 62.8, the lowest since 2011 and well below the all-time high of 2019. Respondents report it’s a good time to buy a house.
Meanwhile, the percentage of consumers who think it’s time to sell has started to decline in recent months, from 76% in May to 67% in July. Overall, four of the six components of the index are down from month to month.
This includes a component related to the expected growth in house prices, which has declined significantly in recent months but remains positive on the net. On an annual basis, the overall index is down by 13.0 points.
“The HPSI has declined steadily for much of the year, as higher mortgage rates continue to take a toll on housing affordability,” said Doug Duncan, Fannie Mae Senior Vice President, and Chief Economist.
“Unfavorable mortgage rates have been increasingly cited by consumers as a top reason behind the growing perception that it’s a bad time to buy, as well as sell, a home.
Additionally, consumers appear to be indicating that selling conditions are softening, as the ‘Good Time to Sell’ component has declined meaningfully over the past two months, and, on the net, fewer consumers expect home prices to go up.
With home price growth slowing, and projected to slow further, we believe consumer reaction to current housing conditions is likely to be increasingly mixed: Some homeowners may opt to list their homes sooner to take advantage of perceived high prices, while some potential homebuyers may choose to postpone their purchase decision believing that home prices may drop.
Overall, this month’s HPSI results appear to confirm our forecast for moderating home sales over the coming year.”
On the right rail of this webpage, you will find a news release with highlights from the HPSI and National Housing Survey results, the latest Data Release highlighting the consumer attitudinal indicators, month-over-month key indicator data, an overview and a white paper about the HPSI, technical notes providing in-depth information about the National Housing Survey methodology, the questionnaire used for the survey, and a comparative assessment of Fannie Mae’s National Housing Survey and other consumer surveys.
Reference Source: Fannie Mae
