In Fannie Mae’s June Home Purchase Sentiment Index (HPSI), consumer sentiment was largely unchanged, with the “good time to buy” and “good time to sell” components showing the most notable results, with 64 percent of respondents saying it is a bad time to buy a home, up from 56 percent last month, and 77 percent of respondents said it is a good time to sell, up from 67 percent last month.
Other HPSI components, such as home price expectations, mortgage rate expectations, job concerns, and household income, are more associated with household finances and job security. In total, the HPSI decreased 0.3 points month-over-month, and was up 3.2 points year-over-year.
“The HPSI remained flat this month, although its underlying buy and sell components continued to diverge, setting record positive and negative readings, respectively,” Doug Duncan, Fannie Mae senior vice president and chief economist, said in a release. “Consumers also continued to cite high home prices as the predominant reason for their ongoing and significant divergence in sentiment toward homebuying and home-selling conditions.
“While all surveyed segments have expressed greater negativity toward homebuying over the last few months, renters who say they are planning to buy a home in the next few years have demonstrated an even steeper decline in homebuying sentiment than homeowners,” he added. “It’s likely that affordability concerns are more greatly affecting those who aspire to be first-time homeowners than other consumer segments who have already established homeownership.”
Those who said home prices will go up increased month-over-month, 47 percent to 48 percent, while respondents who said prices will go down increased from 17 percent to 21 percent. Respondents who believe home prices will stay the same decreased from 29 percent to 25 percent. In total, the net share of respondents who say home prices will go up decreased 3 percentage points month-over-month.
The HPSI showed more respondents believed mortgage rates will go up, 57 percent in June, up from 49 percent in May. Those who said rates will go down over the next 12 months remained at 6 percent. Respondents who thought mortgage rates will stay the same decreased from 38 percent to 30 percent.
Those who said they were not concerned about losing their job in the next 12 months increased slightly, from 87 percent to 88 percent. Those who said they were concerned decreased from 12 percent to 11 percent.
The net share of respondents who said their household income is significantly higher than it was 12 months ago decreased 2 percent month-over-month. Those who said it was significantly higher decreased from 29 percent to 27 percent, and those who said it was significantly lower stayed at 13 percent. Respondents who said their household income is about the same, increased from 54 percent to 56 percent.
“Despite the pessimism in homebuying conditions, we expect demand for housing to persist at an elevated level through the rest of the year,” Duncan said. “Mortgage rates remain not too far from their historical lows, and consumers are expressing even greater confidence about their household income and job situation compared to this time last year, when the pandemic had shut down wide swaths of the economy.”