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Press Release

Home Purchase Sentiment Hits Plateau as High Home Prices Stymie Trade-Up Confidence

August 7, 2018

Matthew Classick


WASHINGTON, DC – The Fannie Mae Home Purchase Sentiment Index® (HPSI) fell in July for the second consecutive month, dropping 4.2 points to 86.5, after reaching survey highs in April and May. The decline can be attributed to decreases in four of the six HPSI components. The net share of survey respondents who said now is a good time to buy a home fell 4 percentage points, and the net share who said it is a good time to sell a home fell 6 percentage points. Additionally, the net share who said that home prices will go up in the next 12 months decreased 7 percentage points. More Americans also expressed a decreased sense of job security, with the net share who said they are not concerned about losing their job falling 11 percentage points in July.

“Home purchase sentiment seems to have reached a plateau, with potential home sellers likely struggling to find a home to buy amid slow supply growth, expectations for rising mortgage rates, and significant home price increases,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Survey respondents cite ‘high home prices’ as the top reason why it is both a good time to sell a home and bad time to buy a home. This suggests a contributing factor to the low supply of existing homes for sale is that current owners are reluctant to trade up in a rising price market. Additionally, the shares of consumers citing favorable mortgage rates as a reason why it’s a good time to buy or sell a home both dropped to fresh survey lows.”


Fannie Mae’s 2018 Home Purchase Sentiment Index (HPSI) decreased in July by 4.2 points to 86.5. The HPSI is down 0.3 points compared with the same time last year.

  • The net share of Americans who say it is a good time to buy a home fell 4 percentage points from last month to 24%.
  • The net share of those who say it is a good time to sell fell 6 percentage points from last month’s survey high to 41%.
  • The net share of those who say home prices will go up fell 7 percentage points to 39%, falling under 40% for the first time since December 2016.
  • The net share of Americans who say mortgage rates will go down over the next 12 months rose 1 percentage point to -52%.
  • The net share of Americans who say they are not concerned about losing their job fell 11 percentage points from last month to 65%.
  • The net share of those who say their household income is significantly higher than it was 12 months ago rose 2 percentage points to 21%, matching the survey high from May 2018.


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.


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 July 2018 National Housing Survey was conducted between July 1, 2018 and July 22, 2018. Most of the data collection occurred during the first two weeks of this period. Interviews were conducted by PSB, in coordination with Fannie Mae.


For detailed findings from the July 2018 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 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.

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