Fannie Mae’s Home Purchase Sentiment Index (HPSI) decreased in February, while consumers reported a more positive view of the labor market compared to January.
The HPSI is a distillation of Fannie Mae’s National Housing Survey that reflects consumers’ current views and expectations of housing market conditions. The evaluation considers answers to six questions about the housing market and other topics related to homebuying decisions.
“As we expected, the HPSI remained relatively flat in February, but underlying data indicate growing job-related optimism among consumers, especially among lower-income and renter groups,” Doug Duncan, Fannie Mae senior vice president and chief economist, said in a release. “With the growing likelihood that lockdown restrictions will continue easing as vaccination efforts ramp up, and with warmer weather on the horizon and another round of fiscal stimulus pending, these two segments of consumers may have good reason to feel more positive about the labor market.
“This optimism appears to be well-placed, too, given Friday’s jobs report from the Bureau of Labor Statistics, which showed the strongest net gain in payroll employment since October, although the unemployment rate remains quite high by historical standards,” he continued. “However, other components of the index remain well below pre-pandemic levels, so we believe there may still be room for improvement in housing and economic attitudes in the coming months, depending in part on the future path of mortgage rates.”
Fannie Mae’s HPSI decreased by 1.2 points to 76.5, down 16 points compared to the same time last year. The percentage of respondents who said it was a good time to buy decreased from 52 percent to 48 percent and those who said it was a good time to sell decreased from 68 percent to 55 percent. Additionally, the number of respondents who expect homes prices to go up in the next 12 months increased from 41 percent to 47 percent and those who thought mortgage rates will go up in the 12 months increased from 45 percent to 47 percent.
Those who said they were not concerned about losing their job in the next 12 months increased from 75 percent to 82 percent, while those who said their household income was significantly higher than it was this time last year decreased from 21 percent to 17 percent. Those who said their household income is about the same decreased from 64 percent to 61 percent.