More Americans Express Concern About Losing Their Job, Latest HPSI Results Show
COVID-19 Concerns Lead to Steep Drop in Housing Sentiment
WASHINGTON, DC – April 7, 2020 – The Fannie Mae (FNMA/OTCQB) Home Purchase Sentiment Index® (HPSI) fell 11.7 points to 80.8 in March, its lowest reading since December 2016. Five of the six HPSI components decreased month over month, including the percentage of Americans expressing concern about losing their job within the next 12 months. Consumers also reported that homebuying and home-selling conditions have worsened and took a more pessimistic view of home price growth. Year over year, the HPSI is down 9.0 points.
“In March, the HPSI dropped to its lowest level since December 2016, with Americans reporting greater concern about their job security than at any point in the last six years,” said Doug Duncan, Senior Vice President and Chief Economist. “Attitudes about the current home-selling environment deteriorated markedly, falling to their lowest level since January 2017. A survey record one-month drop in optimism about the direction of the economy appears to have weakened consumers’ views of both the current home-selling and homebuying environment, though the latter is likely buffered in part by low mortgage rates. When asked why it’s a bad time to buy or sell a home, approximately 7% of consumers offered COVID-19 as an unprompted response, one of the highest percentages of non-standard answers in the survey’s history. We expect these developments to weigh heavily on housing activity during the spring/summer homebuying season.”
Home Purchase Sentiment Index – Component Highlights
Fannie Mae’s Home Purchase Sentiment Index (HPSI) decreased in March by 11.7 points to 80.8. The HPSI is down 9.0 points compared to the same time last year. Read the full research report for additional information.
- Good/Bad Time to Buy: The percentage of Americans who say it is a good time to buy decreased from 59% to 56%, while the percentage who say it is a bad time to buy increased from 32% to 36%. As a result, the net share of Americans who say it is a good time to buy decreased 7 percentage points.
- Good/Bad Time to Sell: The percentage of Americans who say it is a good time to sell decreased from 67% to 52%, while the percentage who say it’s a bad time to sell increased from 22% to 36%. As a result, the net share of those who say it is a good time to sell decreased 29 percent points.
- Home Price Expectations: The percentage of Americans who say home prices will go up in the next 12 months decreased this month from 47% to 39%, while the percentage who said home prices will go down increased from 8% to 22%. The share who think home prices will stay the same decreased from 38% to 32%. As a result, the net share of Americans who say home prices will go up decreased 22 percentage points.
- Mortgage Rate Expectations: The percentage of Americans who say mortgage rates will go down in the next 12 months increased this month from 8% to 20%, while the percentage who expect mortgage rates to go up increased from 38% to 39%. The share who think mortgage rates will stay the same decreased from 46% to 33%. As a result, the net share of Americans who say mortgage rates will go down over the next 12 months increased 11 percentage points.
- Job Concerns: The percentage of Americans who say they are not concerned about losing their job in the next 12 months decreased from 85% to 77%, while the percentage who say they are concerned increased from 13% to 23%. As a result, the net share of Americans who say they are not concerned about losing their job decreased 18 percentage points.
- Household Income: The percentage of Americans who say their household income is significantly higher than it was 12 months ago decreased from 32% to 27%, while the percentage who say their household income is significantly lower remained the same at 11%. The percentage who say their household income is about the same increased from 56% to 61%. As a result, the net share of those who say their household income is significantly higher than it was 12 months ago decreased 5 percentage points.
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 March 2020 National Housing Survey was conducted between March 1, 2020 and March 22, 2020. 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 March 2020 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 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:
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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.