Consumers are taking a more cautious approach to their view of the economy, according to the latest Fannie Mae Home Purchase Sentiment Index.
The index decreased 2.2 points from last month to 82.8 in September and down again from a survey high in July. This month's index also showed a decrease of one point from last year.
The index reflects consumers’ current views and forward-looking expectations of housing market conditions.
According to Fannie Mae's data, the largest decrease came from those who say interest rates will go down over the next 12 months, which dropped six percentage points to 44%.
Those who said now is a good time to buy a home fell five percentage points to 29% and those who were confident about not losing their job in the next year dropped three percentage points to 70%.
Those who said now is a good time to sell a house remained unchanged in September at 15%. In fact, those who said prices will continue to go up increased one percentage point to 34%.
Household income was the only HPSI component to increase in September. Those who reported that their household income is significantly higher than it was 12 months ago increased two percentage points to 12%.
Household income posted its first significant increase in eight years, new data from the U.S. Census Bureau showed.
“The decline in the HPSI over the past two months from the survey-high in July of 86.5 adds a note of caution to our moderately positive housing outlook,” said Doug Duncan, Fannie Mae senior vice president and chief economist.
“Downside changes came in particular from the HPSI components mortgage rate direction and good time to buy a house,” Duncan said. “In addition, the starter home tight supply and rising home prices as well as the unsettled political environment are likely giving many consumers a reason to pause or question their home purchase sentiment.”