More consumers believe now is a good time to buy or sell a home, though in the face of other indicators to the contrary, signaling a sliver of favor for housing.
The recently released Fannie Mae Home Purchase Sentiment Index® (HPSI) continued its decline 1.1 points to 81.7 last month, driven by four of the six indicators in the Index. In October:
- Consumers reporting higher income dropped eight percentage points.
- Consumers reporting higher home price expectations dropped three percentage points.
- Consumers reporting lower mortgage rate expectations dropped one percentage point.
- Consumers reporting higher job security dropped one percentage point.
Consumers reporting a good time to buy a home, however, rose two percentage points, to 31 percent. Consumers reporting a good time to sell a home, likewise, rose four percentage points, to 19 percent.
“The HPSI fell in October for the third straight month from its record high in July, reaching the lowest level since March,” says Doug Duncan, senior vice president and chief economist at Fannie Mae. “Recent erosion in sentiment likely reflects, in part, enhanced uncertainty facing consumers today. Since July, more consumers, on net, have steadily expected mortgage rates to rise and home price appreciation to moderate. Furthermore, consumers’ perception of their income over the past year deteriorated sharply in October to the worst showing since early 2013, weighing on the Index. However, this component of the HPSI is volatile from month to month, and the firming trend in wage gains from the October jobs report, if sustained, may foreshadow an improving view in the near future.”
Source: Fannie Mae