Consumers’ faith in the housing market is stronger than it’s ever been before, according to a newly released survey from Fannie Mae.
Fannie Mae’s latest Home Purchase Sentiment Index shows that consumer confidence in housing hit an all-time high in February, continuing a climb in confidence that began in January.
January’s version of the Home Purchase Sentiment Index showed that consumers’ confidence in housing improved for the first time in five months, and February’s survey saw consumers’ sentiments improve even more.
According to the Fannie Mae report, the Home Purchase Sentiment Index increased by 5.6 percentage points in February to 88.3, setting a new all-time high.
That’s also up 5.6 percentage points from the same time period last year.
Overall, five of the six components that make up the HPSI were up, with three hitting record highs.
According to the report, the net share of Americans who said that now is a good time to buy rose by 11 percentage points, and the net share of consumers who believe that now is a good time to sell also rose by 7 percentage points.
Additionally, consumers also reported increased confidence about not losing their jobs, with the net share climbing by 9 percentage points.
The survey also showed that the share of respondents reporting that their household income is significantly higher than it was 12 months ago increased by 4 percentage points.
More Americans also expect home prices to go up, with the net share rising 3 percentage points. And the net share of consumers who think mortgage rates will go down over the next 12 months held steady for the third consecutive month.
“The latest post-election surge in optimism puts the HPSI at its highest level since its starting point in 2011. Millennials showed especially strong increases in job confidence and income gains, a necessary precursor for increased housing demand from first-time homebuyers,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.
“Preliminary research results from our team find that millennials are accelerating the rate at which they move out of their parents’ homes and form new households,” Duncan continued. “However, continued slow supply growth implies continued strong price appreciation and affordability constraints facing millennials and first-time buyers in many markets.”
Broken down further, the components of the HPSI showed that: