National Housing Survey

Housing Sentiment Edges Upward as Reported Conditions Favor Sellers

Lower-Income and Renter Groups Express Greater Optimism Across Nearly All HPSI Components

February 8, 2021

The Fannie Mae Home Purchase Sentiment Index® (HPSI) increased in January to 77.7, a 3.7 point improvement from December. Consumers reported a significantly more positive view of home-selling conditions month over month, with that particular component jumping 16 percentage points on net. The other five components remained relatively flat. Year over year, the HPSI is down 15.3 points.

“The HPSI experienced a modest uptick in January, reversing much of December’s decline,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “Interestingly, lower-income and renter groups were more optimistic this past month across nearly all of the sentiment index’s components. We will pay close attention to see if this newfound optimism develops into a trend, which could indicate either that some demographics who have been more negatively impacted by the pandemic may be starting to feel the economic recovery or that this is a response to the additional stimulus enacted in December.”

“Overall, the index’s monthly increase was driven largely by a substantial jump in the share of consumers reporting that it’s a good time to sell a home, with many citing favorable mortgage rates, high home prices, and low housing inventory as their primary rationale. Among owners and higher income groups, however, the other five components of the index remained relatively flat or slightly negative, suggesting to us that some consumers are waiting to gauge the effectiveness of any new fiscal policies and vaccination distribution programs on both housing and the larger economy.”