This month marks the one-year anniversary of Fannie Mae’s Home Purchase Sentiment Index being released to the public, and this month it shows a slight retreat in consumer sentiment for August.
In fact, four of the six HPSI components decreased during the month, however they are still up from last year.
The HPSI distills information about consumers’ home purchase sentiment from Fannie Mae’s National Housing Survey into a single number. The number reflects consumers’ current views and forward-looking expectations of housing market conditions and complements existing data sources to inform housing-related analysis and decision making.
Fannie Mae’s HPSI fell 1.5 points from last month to 85 in August. That being said, it is still up 4.2 points from last year.
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(Source: Fannie Mae)
“Consumers have a fairly optimistic 12-month outlook on housing at the end of the summer home-buying season, supported by increased job confidence and more favorable expectations regarding their personal financial situations compared with this time last year,” said Doug Duncan, Fannie Mae senior vice president and chief economist.
“The return to a slight upward trend in the HPSI during the spring and summer is, thus far, in line with our forecast, which calls for 4% growth in home sales in 2016 to the best level since 2006 and continued improvement for 2017,” Duncan said.
Of the HPSI components, the share of consumers who expect home prices to go up in the next 12 months decreased six percentage points to 35%. The share who say now is a good time to sell a time decreased five percentage points to 15%, down from an all-time high in July. Those reporting significantly higher household income fell one percentage point to 10%. Those who say mortgage rates will go down over the next year also fell two percentage points to -38% after increasing over the past three months.
On the other hand, consumers who reported a positive employment outlook from the previous month increased four percentage points to 73%. Those saying it is a good time to buy a home increased for the third consecutive month to 34%.
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(Source: Fannie Mae)
