Housing Sentiment Continues Downward Trend Despite Favorable Economy
WASHINGTON, DC – The Fannie Mae Home Purchase Sentiment Index® (HPSI) decreased in October, falling 2.0 points to 85.7, continuing its recent downward trend. The decline can be attributed to decreases in five of the six components, including those measuring consumers’ home buying and selling attitudes. The net share of Americans who said it is a good time to buy a home fell 5 percentage points, and the net share who said it is a good time to sell a home fell 3 percentage points. Meanwhile, the net share of survey respondents who expect home prices to go up fell 2 percentage points, and the net share who expect mortgage rates to go down fell 1 percentage point. Finally, respondents also expressed a slightly more pessimistic view on job security, with the net share who are confident about not losing their job falling by 1 percentage point.
"After hitting a survey high during the spring home buying season, the HPSI has trended downward, declining in October to its lowest level in a year. While the October drop was broad-based – all but one of the six HPSI components declined – the net share of consumers who said it's a good time to buy a home posted the largest decrease, tying its second lowest reading in the survey's history," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "The further erosion of buying sentiment occurred despite generally positive views of the economy. Among those who said it's a good time to buy, 30 percent – a record high – cited favorable economic conditions as the reason. Meanwhile, the share of consumers who think the economy is on the right track continued to grow, reaching a new survey high. The contrast between the survey's findings of weak home buying sentiment and overall economic optimism mirrors what we're seeing in the broader economy. While economic growth posted the fastest back-to-back pace in four years in the third quarter, residential investment declined for the third consecutive quarter, a first for the current expansion."
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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