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With the die-down in home prices, affordability concerns are fading, according to new research.

In a four-percentage point bump from December, 15 percent of Americans believed it was “a good time to buy a home” in January, according to the Fannie Mae Home Purchase Sentiment Index® (HPSI), a gauge of housing market optimism.

Meanwhile, 35 percent believed it was “a good time to sell”—a one-percentage point dip.

Although confidence is down year-over-year—it was 27 percent of homebuyers and 38 percent of home sellers then—the amount of either who are expecting home prices to surge has waned, falling to 30 percent this January from 52 percent the prior year.

So, what boosted buyer confidence in January?

Paychecks. According to the HPSI, 27 percent of Americans said they had considerably higher household income—an eight-percentage point increase month-over-month and an 11-percentage point jump year-over-year.

“Movement among the HPSI components points to possible housing affordability relief at the start of 2019,” says Doug Duncan, senior vice president and chief economist at Fannie Mae. “The net share of consumers expecting home prices to increase over the next year has declined further, falling to the lowest level since late 2012.

“Consumer perceptions of household income growth have improved, with the net share noting rising income over the past year hitting a survey high,” Duncan says. “Furthermore, fewer consumers since last summer, on net, believe that mortgage rates will rise over the next year—a sentiment consistent with the Fed’s statement at its January meeting that it will be patient with future target rate adjustments.”

With the economy on firmer footing and the Federal Reserve shifting its stance—indicating less rate rises this year—mortgage rates are steadying. (The average 30-year, fixed mortgage rate stands at 4.41 percent, according to Freddie Mac.) The leveling-out has the potential to pump up sales, which have been critically impacted by inventory and prices.

“These [HPSI] results are in line with our forecast that, amid improving affordability conditions, home sales should stabilize in 2019 after declining last year for the first time in four years,” says Duncan.

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com.

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