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National Housing Survey/Home Purchase Sentiment Index (HPSI)

HPSI Increases as Housing Confidence Continues Upward Trend

May 8, 2023

The 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.”

Downloads and Related Links
April 2023 News Release
April 2023 National Housing Survey Data Release  

National Housing Survey Monthly Indicators Archive
Click here for an archived list of Fannie Mae's National Housing Survey Monthly Indicators.