National Housing Survey
HPSI Increases as Housing Confidence Continues Upward Trend
Survey Finds Greater Consumer Optimism About Mortgage Rates
May 8, 2023
The Fannie Mae Home Purchase Sentiment Index® (HPSI) increased in April to its highest level since May 2022, jumping 5.5 points to 66.8. All six of the HPSI’s components increased month over month, most notably the component associated with consumers’ expectations of mortgage rates. While the component remains negative on net – meaning more respondents than not expect mortgage rates to go up over the next year – in April, 22% of consumers indicated that they expect mortgage rates to go down, compared to only 12% last month. Of course, affordability constraints continue to hinder overall homebuying sentiment, with only 23% of respondents indicating it’s a good time to buy a home, although a plurality once again believe that home prices will increase over the next 12 months. Year over year, the full index is down 1.7 points.
“This month’s increase in the HPSI was the largest in over two years, primarily driven by consumers’ more optimistic mortgage rate expectations,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “An increased number of respondents indicated they think mortgage rates will go down over the next year, a belief that could be due to a combination of factors, including an awareness of decelerating inflation, market suggestions that monetary conditions will ease in the not-too-distant future, and, of course, actual mortgage rate declines during the month.”
Duncan continued: “However, the bump in optimism may prove to be temporary, as consumers continue to report uncertainty about the direction of home prices – and we know that high home prices remain the primary reason given by consumers who think it’s a bad time to buy a home. Until affordability improves for a larger swath of the homebuying public, we believe home sales will remain subdued compared to previous years.”
On the right rail of this webpage, you will find a news release with highlights from the HPSI and National Housing Survey results, the latest Data Release highlighting the consumer attitudinal indicators, month-over-month key indicator data, an overview and white paper about the HPSI, technical notes providing in-depth information about the National Housing Survey methodology, the questionnaire used for the survey, and a comparative assessment of Fannie Mae’s National Housing Survey and other consumer surveys.
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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.
