Home Purchase Sentiment Index Posts Lowest Reading in Last 18 Months, Falling to 80.2 in March
Fannie Mae’s Home Purchase Sentiment Index™ (HPSI) decreased 2.5 points to 80.2 in March. Four of the six HPSI components fell in March, and the survey shows a more negative consumer outlook on the direction of the economy. The largest drop among the HPSI components was the net share of consumers who think now is a good time to sell a home, which fell by 8 percentage points. Despite the Bureau of Labor Statistics’ March employment report showing strong job creation and continued expansion of the labor force, HPSI respondents surveyed in March noted that their confidence about not losing their job decreased 7 percentage points on net and fell from an all-time survey high in February. In addition, the Household Income component fell 4 percentage points on net with fewer consumers reporting that their income was significantly higher than it was 12 months ago.
“Growing pessimism over the last three months about the direction of the economy seems to be spilling over into home purchase sentiment,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The gap between the share of consumers who think the economy is on the wrong track and the share who think it is on the right track has widened, nearly matching its reading last August, when concerns regarding China and oil prices led to the biggest stock market plunge in years. In turn, we saw dips this month in income growth perceptions, attitudes about the home selling climate, and job confidence, all of which contributed to the lowest HPSI reading in the last year and a half. These declines seem to be at odds with recent news of solid overall job creation, but may reflect weakening economic performance in certain industries.”
On this webpage you will find a news release with highlights from the HPSI and NHS 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 NHS 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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