Consumers’ Attitude Toward Housing Conditions Remains Mixed
WASHINGTON, DC – The Fannie Mae (FNMA/OTCQB) Home Purchase Sentiment Index® (HPSI) increased 1 point to 75.5 in October, as consumers once again reported mixed feelings about homebuying and home-selling conditions, as well as increased pessimism regarding the larger economy. Overall, four of the index’s six components increased month over month. In October, slightly greater shares of consumers reported that it’s a good time to buy a home and sell a home – with those numbers now sitting at 30 percent and 77 percent, respectively, up from 28 percent and 74 percent last month. Consumers also reported even stronger expectations that mortgage rates will increase over the next 12 months. Year over year, the full index is down 6.2 points.
“The HPSI remained relatively flat this month, staying within the general bounds it began to set in June 2020 – following the initial shock of the pandemic to the index,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “While homebuying and home-selling sentiment remain at historically low and high levels, respectively, more consumers now expect that their personal financial situation will not improve over the next 12 months. This is particularly true among surveyed homeowners and older age groups.”
Duncan continued: “In October, consumers also reported greater concern about the direction of the economy, with ‘right track’ sentiment reaching its lowest level since October 2013. We believe the uptick in negative economic sentiment is likely a function of ongoing supply chain disruptions and inflation concerns. However, while economic uncertainty could potentially dampen mortgage demand over the longer term, we believe current market conditions remain conducive to home purchase activity, as demand for homes continues to far outstrip the supply available for sale.”
Home Purchase Sentiment Index – Component Highlights
Fannie Mae’s Home Purchase Sentiment Index (HPSI) increased in October by 1 point to 75.5. The HPSI is down 6.2 points compared to the same time last year. Read the full research report for additional information.
- Good/Bad Time to Buy: The percentage of respondents who say it is a good time to buy a home increased from 28% to 30%, while the percentage who say it is a bad time to buy decreased from 66% to 65%. As a result, the net share of those who say it is a good time to buy increased 3 percentage points month over month.
- Good/Bad Time to Sell: The percentage of respondents who say it is a good time to sell a home increased from 74% to 77%, while the percentage who say it’s a bad time to sell decreased from 19% to 17%. As a result, the net share of those who say it is a good time to sell increased 5 percentage points month over month.
- Home Price Expectations: The percentage of respondents who say home prices will go up in the next 12 months increased from 37% to 39%, while the percentage who say home prices will go down decreased from 24% to 22%. The share who think home prices will stay the same decreased from 33% to 32%. As a result, the net share of Americans who say home prices will go up increased 4 percentage points month over month.
- Mortgage Rate Expectations: The percentage of respondents who say mortgage rates will go down in the next 12 months decreased from 8% to 5%, while the percentage who expect mortgage rates to go up increased from 51% to 55%. The share who think mortgage rates will stay the same remained unchanged at 33%. As a result, the net share of Americans who say mortgage rates will go down over the next 12 months decreased 7 percentage points month over month.
- Job Concerns: The percentage of respondents who say they are not concerned about losing their job in the next 12 months increased from 81% to 84%, while the percentage who say they are concerned decreased from 16% to 15%. As a result, the net share of Americans who say they are not concerned about losing their job increased 4 percentage points month over month.
- Household Income: The percentage of respondents who say their household income is significantly higher than it was 12 months ago decreased from 27% to 23%, while the percentage who say their household income is significantly lower decreased from 13% to 12%. The percentage who say their household income is about the same increased from 57% to 62%. As a result, the net share of those who say their household income is significantly higher than it was 12 months ago decreased 3 percentage points month over month.
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 approximately 1,000 respondents 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). 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 support the housing market. The October 2021 National Housing Survey was conducted between October 1, 2021 and October 23, 2021. Most of the data collection occurred during the first two weeks of this period. Interviews were conducted by PSB, in coordination with Fannie Mae.
Detailed HPSI & NHS Findings
For detailed findings from the October 2021 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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About Fannie Mae
Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of people in America. We partner with lenders to create housing opportunities for people 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:
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Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's Economic & Strategic Research (ESR) Group included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR Group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.