News Release

May 08, 2017

Housing Sentiment in April Rebounds Following March Dip

Matthew Classick

202-752-3662

WASHINGTON, DC – The Fannie Mae Home Purchase Sentiment Index® (HPSI) increased 2.2 percentage points in April to 86.7, rebounding following March’s dip. Five of the six components that comprise the HPSI were up. The net share of Americans who reported that now is a good time to buy a home increased 5 percentage points, while the net share reporting that now is a good time to sell a home decreased 5 percentage points. Consumers also expressed greater confidence about the stability of their jobs, with the net share of that component jumping 7 percentage points. Additionally, on net, the share of respondents reporting that their household income is significantly higher than it was 12 months ago increased 2 percentage points. The net share of Americans who say that mortgage rates will go down over the next twelve months rose 3 percentage points. Finally, the net share of those who think home prices will go up increased by 1 percentage point this month.

“The Home Purchase Sentiment Index returned to its longer-term trend line after reclaiming ground lost last month. This is aligned with our market forecast of about 3 percent sales growth in 2017,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Historically strong inflation-adjusted house price gains are tempering consumer sentiment, whereas consumer optimism regarding the ease of getting a mortgage reached a survey high. On balance, housing continues on a gradual growth track.”

HOME PURCHASE SENTIMENT INDEX – COMPONENT HIGHLIGHTS

Fannie Mae’s 2017 Home Purchase Sentiment Index (HPSI) increased in April by 2.2 percentage points to 86.7. The HPSI is up 3.0 percentage points compared with the same time last year.

  • The net share of Americans who say it is a good time to buy a home rose 5 percentage points to 35%, reversing some of the decrease seen in March.
  • The net percentage of those who say it is a good time to sell decreased by 5 percentage points to 26%, falling from last month’s all-time survey high.
  • The net share of Americans who say that home prices will go up increased by 1 percentage point in April to 45%.
  • The net share of those who say mortgage rates will go down over the next twelve months rose 3 percentage points from last month’s survey low to -57%.
  • The net share of Americans who say they are not concerned about losing their job rose 7 percentage points to 77%, erasing most of last month’s decline.
  • The net share of Americans who say their household income is significantly higher than it was 12 months ago rose 2 percentage points to 13% in April.

ABOUT FANNIE MAE’S HOME PURCHASE SENTIMENT INDEX

The Home Purchase Sentiment Index (HPSI) distills information about consumers’ home purchase sentiment from Fannie Mae’s National Housing Survey® (NHS) into a single number. The HPSI 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. The HPSI is constructed from answers to six NHS questions that solicit consumers’ evaluations of housing market conditions and address topics that are related to their home purchase decisions. The questions ask consumers whether they think that it is a good or bad time to buy or to sell a house, what direction they expect home prices and mortgage interest rates to move, how concerned they are about losing their jobs, and whether their incomes are higher than they were a year earlier.

ABOUT FANNIE MAE’S NATIONAL HOUSING SURVEY

The most detailed consumer attitudinal survey of its kind, Fannie Mae’s National Housing Survey (NHS) polled 1,000 Americans via live telephone interview to assess their attitudes toward owning and renting a home, home and rental price changes, homeownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts, six of which are used to construct the HPSI (findings are compared with the same survey conducted monthly beginning June 2010). As cell phones have become common and many households no longer have landline phones, the NHS contacts 60 percent of respondents via their cell phones (as of October 2014). For more information, please see the Technical Notes. Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to stabilize the housing market in the near-term, and provide support in the future. The April 2017 National Housing Survey was conducted between April 1, 2017 and April 22, 2017. Most of the data collection occurred during the first two weeks of this period. Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae.

DETAILED HPSI & NHS FINDINGS

For detailed findings from the April 2017 Home Purchase Sentiment Index and National Housing Survey, as well as a brief HPSI overview and detailed white paper, technical notes on the NHS methodology, and questions asked of respondents associated with each monthly indicator, please visit the Surveys page on fanniemae.com. Also available on the site are in-depth special topic studies, which provide a detailed assessment of combined data results from three monthly studies of NHS results.

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Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of Americans. We partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing finance to make the home buying process easier, while reducing costs and risk. To learn more, visit fanniemae.com and follow us on twitter.com/FannieMae.