Consumers’ Economic and Financial Concerns Keep Housing Confidence in Check
Measure of Housing Sentiment Retreats Slightly from Prior Month's Survey High
WASHINGTON, DC – The Fannie Mae (FNMA/OTCQB) Home Purchase Sentiment Index® (HPSI) decreased 2.3 points in September to 91.5, retreating from a survey high in August. Three of the six HPSI components decreased month over month, including an 8-percentage point drop in the net "Confidence About Not Losing Job" component and 7-percentage point drop in the net "Home Prices Will Go Up" component. These were partially offset by increases in the "Good Time to Buy" and "Good Time to Sell" components, at 3 and 4 percentage points on net, respectively.
"Consumer sentiment remains relatively strong overall, though uncertainty about the economy and individual financial circumstances appear to be weighing on housing market attitudes a bit more than a month ago," said Doug Duncan, Senior Vice President and Chief Economist. "Views about the direction of the economy held relatively steady, and the share of respondents who say it's a good time to buy or sell a home rose slightly. However, consumers who are pessimistic about current housing market conditions are more likely to cite unfavorable economic conditions than the prior month. Job confidence remains high but still well shy of its July reading. Despite some added uncertainty, the September HPSI indicates continued strength in housing market attitudes and is consistent with recent data on housing activity."
HOME PURCHASE SENTIMENT INDEX – COMPONENT HIGHLIGHTS
Fannie Mae's 2019 Home Purchase Sentiment Index (HPSI) decreased in September by 2.3 points to 91.5. The HPSI is up 3.8 points compared to the same time last year.
- The net share of Americans who say it is a good time to buy increased 3 percentage points to 28%.
- The net share of those who say it is a good time to sell rose by 4 percentage points to 44%, the same level as July.
- The net share of Americans who say home prices will go up fell 7 percentage points to 29%, continuing the decline that started in June.
- The net share of Americans who say mortgage rates will go down over the next 12 months fell 6 percentage points to -23%.
- The net share of Americans who say they are not concerned about losing their job fell 8 percentage points to 69%, continuing the decline from last month.
- The net share of those who say their household income is significantly higher than it was 12 months ago remained the same at 21%.
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 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 70 percent of respondents via their cell phones (as of January 2018). 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 September 2019 National Housing Survey was conducted between September 1, 2019 and September 24, 2019. 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 September 2019 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.
To receive e-mail updates with other housing market research from Fannie Mae's Economic & Strategic Research Group, please click here.Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's Economic & Strategic Research (ESR) group or survey respondents 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 or survey respondents as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.
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.