Consumer Sentiment Toward Housing at Lowest Level in Decade
The Fannie Mae Home Purchase Sentiment Index® (HPSI) decreased 2.0 points in July to 62.8, its lowest level since 2011 and well below the all-time high set in 2019. Surveyed consumers continue to express pessimism about homebuying conditions, with only 17% of respondents reporting it’s a good time to buy a home. Meanwhile, the percentage of consumers believing it’s a good time to sell has begun ticking downward in recent months, falling from 76% in May to 67% in July. Overall, four of the index’s six components decreased month over month, including the component associated with home price growth expectations, which has fallen meaningfully over the past few months but remains positive on net. Year over year, the full index is down 13.0 points.
“The HPSI has declined steadily for much of the year, as higher mortgage rates continue to take a toll on housing affordability,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “Unfavorable mortgage rates have been increasingly cited by consumers as a top reason behind the growing perception that it’s a bad time to buy, as well as sell, a home. Additionally, consumers appear to be indicating that selling conditions are softening, as the ‘Good Time to Sell’ component has declined meaningfully over the past two months, and, on net, fewer consumers expect home prices to go up. With home price growth slowing, and projected to slow further, we believe consumer reaction to current housing conditions is likely to be increasingly mixed: Some homeowners may opt to list their homes sooner to take advantage of perceived high prices, while some potential homebuyers may choose to postpone their purchase decision believing that home prices may drop. Overall, this month’s HPSI results appear to confirm our forecast for moderating home sales over the coming year.”
National Housing Survey Monthly Indicators Archive
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