HPSI Flat as Continued Economic Optimism Offset by Softening Housing Attitudes

Measure of Consumer Sentiment Down 1.5 Points Year over Year

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Mar 07, 2019, 08:30 ET

WASHINGTON, March 7, 2019 /PRNewswire/ -- The Fannie Mae Home Purchase Sentiment Index^® (HPSI) decreased 0.4 points in February to 84.3, reversing some of the increase seen in January. The largest change among the HPSI components this month was a 9-percentage point drop in the net share of Americans who reported substantially higher household income compared to the same time last year, which was offset by an 8-percentage point jump in the job confidence component.

"The HPSI held steady in February, as consumers' continuing optimism about economic conditions seems to be balanced with softening attitudes toward the housing market," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "Job confidence reached a new survey high, but consumers were less optimistic about home buying and selling conditions than they were a year ago. Notably, home price growth expectations have trended significantly downward, with the net share of consumers expecting home prices to rise falling 19 percentage points from its survey high established at the start of 2018. While declining home price expectations may point to improving affordability, the share of consumers who think it's a bad time to buy has grown over the last year, and high home prices remain the most frequently cited concern. It is plausible that consumers believe that price gains could decelerate further, making it worthwhile to wait rather than act now."

HOME PURCHASE SENTIMENT INDEX – COMPONENT HIGHLIGHTS

Fannie Mae's 2019 Home Purchase Sentiment Index (HPSI) decreased in February by 0.4 points to 84.3. The HPSI is down 1.5 points compared with the same time last year.

The net share of Americans who say it is a good time to buy a home remained unchanged this month at 15%. This component is down 7 percentage points from the same time last year.
The net share of those who say it is a good time to sell a home decreased 5 percentage points to 30%. This component is down 6 percentage points from the same time last year.
The net share of those who say home prices will go up increased 3 percentage points to 33%. This component is down 12 percentage points from the same time last year.
The net share of Americans who say mortgage rates will go down over the next 12 months increased 1 percentage point to -52%. This component is up 5 percentage points from the same time last year.
The net share of Americans who say they are not concerned about losing their job increased 8 percentage points to 81%. This component is up 10 percentage points from the same time last year.
The net share of those who say their household income is significantly higher than it was 12 months ago decreased 9 percentage points to 18%. This component is up 1 percentage point from the same time last year.

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 most detailed consumer attitudinal survey of its kind, Fannie Mae's National Housing Survey (NHS) polled approximately 1,000 Americans via live telephone interview to assess their attitudes toward owning and renting a home, home and rental price changes, homeownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used 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). As cell phones have become common and many households no longer have landline phones, the NHS contacts 70 percent of respondents via their cell phones (as of January 2018). 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 stabilize the housing market in the near-term, and provide support in the future. The February 2019 National Housing Survey was conducted between February 2, 2019 and February 24, 2019. Most of the data collection occurred during the first two weeks of this period. Interviews were conducted by PSB, in coordination with Fannie Mae.

DETAILED HPSI & NHS FINDINGS

For detailed findings from the February 2019 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.

Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of Americans. We partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing finance to make the home buying process easier, while reducing costs and risk. To learn more, visit fanniemae.com and follow us on twitter.com/fanniemae.

SOURCE Fannie Mae