The Fannie Mae (OTCQB: FNMA) Home Purchase Sentiment Index® (HPSI) increased in March by 5.2 points to 81.7. Four of the HPSI’s six components increased month over month, including the components related to homebuying and home-selling conditions, household income, and home prices. The mortgage rate outlook component experienced the only decline; and the latest results indicate that only 6% of consumers believe that mortgage rates will decrease over the next 12 months. Year over year, the HPSI is up 0.9 points.
“The significant increase in the HPSI in March reflects consumer optimism toward the housing market and larger economy as vaccinations continue to roll out, a third round of stimulus checks was distributed, and the spring homebuying season began – perhaps with even more intensity this year, since 2020’s spring homebuying season was limited by virus-related lockdowns,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “Home-selling sentiment experienced positive momentum across most consumer segments – nearly reaching pre-pandemic levels and generally indicative of a strong seller’s market. Consumers once again cited high home prices and tight inventory as primary reasons why it’s a good time to sell. Alternatively, while the net ‘good time to buy’ component increased month over month, it has not recovered to pre-pandemic levels, as the homebuying experience continues to prove difficult for many of the same reasons, namely high prices and a lack of supply.”
Fannie Mae’s Economic and Strategic Research Group recently published new research on the evolution of consumers’ home-purchase attitudes and behaviors during the pandemic, including a Perspectives blog on consumers’ perceptions of homeownership as an investment, as well as a whitepaper on homebuyers’ pandemic-driven movement away from highly dense city centers.
Home Purchase Sentiment Index – Component Highlights
Fannie Mae’s Home Purchase Sentiment Index (HPSI) increased in March by 5.2 points to 81.7. The HPSI is up 0.9 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 increased from 48% to 53%, while the percentage who say it is a bad time to buy decreased from 43% to 40%. As a result, the net share of those who say it is a good time to buy increased 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 increased from 55% to 61%, while the percentage who say it’s a bad time to sell decreased from 35% to 28%. As a result, the net share of those who say it is a good time to sell increased 13 percentage points month over month.
- Home Price Expectations: The percentage of respondents who say home prices will go up in the next 12 months increased from 47% to 50%, while the percentage who say home prices will go down decreased from 18% to 14%. The share who think home prices will stay the same remained unchanged at 29%. As a result, the net share of Americans who say home prices will go up increased 7 percentage points month over month.
- Mortgage Rate Expectations: The percentage of respondents who say mortgage rates will go down in the next 12 months decreased from 8% to 6%, while the percentage who expect mortgage rates to go up increased from 47% to 54%. The share who think mortgage rates will stay the same decreased from 38% to 34%. As a result, the net share of Americans who say mortgage rates will go down over the next 12 months decreased 9 percentage points month over month.
- Job Concerns: The percentage of respondents who say they are not concerned about losing their job in the next 12 months remained unchanged at 82%, while the percentage who say they are concerned also remained unchanged at 17%. As a result, the net share of Americans who say they are not concerned about losing their job remained unchanged month over month.
- Household Income: The percentage of respondents who say their household income is significantly higher than it was 12 months ago increased from 17% to 25%, while the percentage who say their household income is significantly lower decreased from 19% to 15%. The percentage who say their household income is about the same decreased from 61% to 56%. As a result, the net share of those who say their household income is significantly higher than it was 12 months ago increased 12 percentage points month over month.