Consumers Report Improving Job Security, Healthy Household Finances

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Aug 07, 2023, 08:30 ET

But Only 18% Believe It's a Good Time to Buy a Home

WASHINGTON, Aug. 7, 2023 /PRNewswire/ -- The Fannie Mae (OTCQB: FNMA) Home Purchase Sentiment Index^® (HPSI) increased slightly in July, as consumers' increased confidence regarding their personal financial situations was largely offset by further pessimism toward homebuying conditions. Three of the HPSI's six components increased month over month, including the components measuring job security and home price expectations. However, 82% of consumers reported that it's a "bad time to buy" a home, a new survey high and up from 78% in June. The full index is up 4.0 points year over year.

"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," said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. "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 twelve months ago. However, homebuying sentiment once again matched its all-time low, with only 18% 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. 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."

Home Purchase Sentiment Index – Component Highlights

Fannie Mae's Home Purchase Sentiment Index (HPSI) increased in July by 0.8 points to 66.8. The HPSI is up 4.0 points compared to the same time last year. Read the full research report for additional information.

Good/Bad Time to Buy: The percentage of respondents who say it is a good time to buy a home decreased from 22% to 18%, while the percentage who say it is a bad time to buy increased from 78% to 82%. As a result, the net share of those who say it is a good time to buy decreased 8 percentage points month over month.
Good/Bad Time to Sell: The percentage of respondents who say it is a good time to sell a home remained unchanged at 64%, while the percentage who say it's a bad time to sell remained unchanged at 36%. As a result, the net share of those who say it is a good time to sell remained unchanged month over month.
Home Price Expectations: The percentage of respondents who say home prices will go up in the next 12 months increased from 36% to 41%, while the percentage who say home prices will go down decreased from 26% to 24%. The share who think home prices will stay the same decreased from 37% to 34%. 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.
Mortgage Rate Expectations: The percentage of respondents who say mortgage rates will go down in the next 12 months remained unchanged at 16%, while the percentage who expect mortgage rates to go up decreased from 47% to 45%. The share who think mortgage rates will stay the same increased from 36% to 38%. 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.
Job Loss Concern: The percentage of respondents who say they are not concerned about losing their job in the next 12 months increased from 77% to 80%, while the percentage who say they are concerned decreased 2 percentage points from 22% to 20%. 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.
Household Income: The percentage of respondents who say their household income is significantly higher than it was 12 months ago remained unchanged at 19%, while the percentage who say their household income is significantly lower remained unchanged at 10%. The percentage who say their household income is about the same remained unchanged at 71%. As a result, the net share of those who say their household income is significantly higher than it was 12 months ago remained unchanged month over month.

About Fannie Mae's Home Purchase Sentiment Index
The Home Purchase Sentiment Index^® (HPSI) distills information about consumers' home purchase sentiment from Fannie Mae's National Housing Survey^® (NHS) into a single number. The HPSI reflects consumers' current views and forward-looking expectations of housing market conditions and complements existing data sources to inform housing-related analysis and decision making. The HPSI is constructed from answers to six NHS questions that solicit consumers' evaluations of housing market conditions and address topics that are related to their home purchase decisions. The questions ask consumers whether they think that it is a good or bad time to buy or to sell a house, what direction they expect home prices and mortgage interest rates to move, how concerned they are about losing their jobs, and whether their incomes are higher than they were a year earlier.

About Fannie Mae's National Housing Survey
The National Housing Survey (NHS) is a monthly attitudinal survey, launched in 2010, which polls the adult general population of the United States to assess their attitudes toward owning and renting a home, purchase and rental prices, household finances, and overall confidence in the economy. Each respondent is asked more than 100 questions, making the NHS one of the most detailed attitudinal longitudinal surveys of its kind, to track attitudinal shifts, six of which are used to construct the HPSI (findings are compared with the same survey conducted monthly beginning June 2010). For more information, please see the Technical Notes.

Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to support the housing market. The July 2023 National Housing Survey was conducted between July 1, 2023 and July 19, 2023. Most of the data collection occurred during the first two weeks of this period. The latest NHS was conducted exclusively through AmeriSpeak^®, NORC at the University of Chicago's probability-based panel, on behalf of PSB Insights and in coordination with Fannie Mae. Calculations are made using unrounded and weighted respondent level data to help ensure precision in NHS results from wave to wave. As a result, minor differences in calculated data (summarized results, net calculations, etc.) of up to 1 percentage point may occur due to rounding.

Detailed HPSI & NHS Findings
For detailed findings from the Home Purchase Sentiment Index and National Housing Survey, as well as a brief HPSI overview and detailed white paper, technical notes on the NHS methodology, and questions asked of respondents associated with each monthly indicator, please visit the Surveys page on fanniemae.com. Also available on the site are in-depth special topic studies, which provide a detailed assessment of combined data results from three monthly studies of NHS results.

To receive e-mail updates with other housing market research from Fannie Mae's Economic & Strategic Research Group, please click here.

About the ESR Group
Fannie Mae's Economic and Strategic Research Group, led by Chief Economist Doug Duncan, studies current data, analyzes historical and emerging trends, and conducts surveys of consumer and mortgage lender groups to provide forecasts and analyses on the economy, housing, and mortgage markets. The ESR Group was awarded the prestigious 2022 Lawrence R. Klein Award for Blue Chip Forecast Accuracy based on the accuracy of its macroeconomic forecasts published over the 4-year period from 2018 to 2021.

About Fannie Mae
Fannie Mae advances equitable and sustainable access to homeownership and quality, affordable rental housing for millions of people across America. We enable the 30-year fixed-rate mortgage and drive responsible innovation to make homebuying and renting easier, fairer, and more accessible. To learn more, visit: fanniemae.com | Twitter | Facebook | LinkedIn | Instagram | YouTube | Blog

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Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's Economic & Strategic Research (ESR) Group or survey respondents included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR Group represent the views of that group or survey respondents as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.

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