Overall Housing Confidence Up as Rising Home Prices Influence Increasingly Divergent Home Buying and Selling Sentiment

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Sep 07, 2017, 08:30 ET

WASHINGTON, Sept. 7, 2017 /PRNewswire/ -- The Fannie Mae Home Purchase Sentiment Index^® (HPSI) increased 1.2 points in August to 88.0, just below the all-time high set in June. The rise can be attributed primarily to increases in two of the six HPSI components: the good time to sell component and the mortgage rates expectations component. The net share who reported that now is a good time to sell a home rose 8 percentage points in August and is now up 21 percentage points compared to the same period last year. Meanwhile, the net share who said it's a good time to buy fell 5 percentage points in July and is down 16 percentage points year-over-year. Respondents continue to cite high home prices as the most important reason behind the bad time to buy and good time to sell indicators. The net share of those who believe mortgage rates will go down increased 4 percentage points, while the net share of Americans who believe home prices will go up increased 1 percentage point. Americans also expressed a reduced sense of job security, with the net share who say they are not concerned about losing their job falling 1 percentage point. Finally, the share of consumers who reported that their income is significantly higher than it was 12 months ago remains unchanged.

"In the early stages of the economic expansion, home selling sentiment trailed home buying sentiment by a significant margin. The reverse is true today," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "The net good time to sell share is now double the net good time to buy share, with record high percentages of consumers citing home prices as the primary reason for both perceptions. Such a sizable gap between selling and buying sentiment, if it persists, could weigh on the housing market through the rest of the year."

HOME PURCHASE SENTIMENT INDEX – COMPONENT HIGHLIGHTS

Fannie Mae's 2017 Home Purchase Sentiment Index (HPSI) increased in August by 1.2 points to 88.0. The HPSI is up 3.0 points compared with the same time last year.

The net share of Americans who say it is a good time to buy a home fell 5 percentage points to 18%, reaching a new survey low for the second consecutive month, with the share who say it's a bad time to buy and the share who say it's a good time to buy reaching another new survey high and low, respectively.
The net percentage of those who say it is a good time to sell increased by 8 percentage points to 36%.
The net share of Americans who say that home prices will go up increased by 1 percentage point in August to 48%, continuing the upward trend this quarter.
The net share of those who say mortgage rates will go down over the next twelve months rose 4 percentage points to -45%.
The net share of Americans who say they are not concerned about losing their job fell by 1 percentage point to 74%.
The net share of Americans who say their household income is significantly higher than it was 12 months ago remains unchanged from July at 16%.

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 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 60 percent of respondents via their cell phones (as of October 2014). 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 August 2017 National Housing Survey was conducted between August 1, 2017 and August 22, 2017. Most of the data collection occurred during the first two weeks of this period. Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae.

DETAILED HPSI & NHS FINDINGS

For detailed findings from the August 2017 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