Fannie Mae’s Home Purchase Sentiment Index (HPSI) increased slightly in July (0.8 points) to 66.8. That is up 4 points year-over-year. Three of the HPSI’s six components increased month-over-month, including job security and home price expectations.
However, a record high 82 percent of consumers reported it’s a “bad time to buy” a home, up from 78 percent in June.
“While consumers are reporting confidence in the components related to their personal financial situations, it’s unlikely we’ll see housing sentiment catch up to other broader economic confidence measures until there is meaningful improvement to home purchase affordability,” Fannie Mae Senior Vice President and Chief Economist Doug Duncan said in a release.
“In July, a significant majority of consumers indicated that their jobs are stable and that their incomes are the same or better than they were 12 months ago. However, homebuying sentiment once again matched its all-time low, with only 18 percent telling us that it’s a good time to buy a home. Unsurprisingly, consumers continue to attribute the challenging conditions to high home prices and unfavorable mortgage rates,” Duncan said. “Further, the share of consumers expecting home prices to continue to rise has also been on a steady climb since March, which may only add to perceptions of unaffordability.
“Additionally, we have not seen much movement in the ‘good time to sell’ component over the last few months, an indication that the current low levels of existing homes for sale will likely continue to persist in the near term, as also reflected in our latest forecast.”
According to the HPSI, the percentage of respondents:
- who said it is a good time to buy a home fell from 22 percent to 18 percent, while the percentage who say it is a bad time to buy increased from 78 percent to 82 percent, so the net share of those who say it is a good time to buy decreased 8 percentage points month-over-month.
- who said it is a good time to sell a home remained at 64 percent, while the percentage who said it is a bad time to sell remained at 36 percent.
- who said home prices will go up in the next 12 months increased from 36 percent to 41 percent, the percentage who said home prices will go down decreased from 26 percent to 24 percent, and those who think home prices will stay the same decreased from 37 percent to 34 percent. As a result, the net share of those who say home prices will go up in the next 12 months increased 6 percentage points month-over-month.
- who said mortgage rates will go down in the next 12 months remained at 16 percent, the percentage who expect mortgage rates to go up decreased from 47 percent to 45 percent, and the share who think mortgage rates will stay the same increased from 36 percent to 38 percent. As a result, the net share of those who say mortgage rates will go down over the next 12 months increased 3 percentage points month-over-month.
- who said they are not concerned about losing their job in the next 12 months increased from 77 percent to 80 percent, while the percentage who said they are concerned decreased 2 percentage points from 22 percent to 20 percent. As a result, the net share of those who say they are not concerned about losing their job increased 6 percentage points month-over-month.
- who said their household income is significantly higher than it was 12 months ago remained unchanged at 19 percent, the percentage who said their income is significantly lower remained unchanged at 10 percent, and the percentage who said their household income is about the same remained unchanged at 71 percent.