High Real Estate Prices Continue To Affect Home Buying Sentiment

There is a great disparity between the conditions of purchase and sale of housing, consumer report

Home Purchase Sentiment Index “The (HPSI) declined slightly this month, but remains within the general limits we’ve seen since late last year,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The history of the survey hasn’t changed much either: Consumers feel it’s a bad time to buy a home but a good time to sell, and they continue to cite high home prices as the main reason. Across all consumer segments, renters and younger consumers were slightly more likely to indicate that it is a bad time to buy, perhaps a reflection of their generally lower incomes and their observation that affordable housing is unavailable. . We are also seeing a weakening in consumer expectations that home prices will continue to rise; however, in our view, other fundamentals in the housing market continue to support further home price appreciation, including low inventory levels and low interest rates. “

The Fannie Mae Home Buying Sentiment Index (HPSI) (FNMA / OTCQB) declined 1.2 points to 74.5 in September as respondents continued to report divergent views on home buying and selling conditions. Overall, three of the six components of the index declined month-over-month. In particular, an even higher proportion of consumers reported that it is a bad time to buy a home, with that number now at 66 percent, compared to 63 percent last month and significantly higher than 28% of those in the home market. respondents who think it is a good time. to buy. The component of housing sales conditions remained practically flat, and a large majority of consumers said that it is a good time to sell. Year-over-year, the entire index is down 6.5 points.

Home Purchase Sentiment Index – Component Highlights

Fannie Mae’s Home Purchase Sentiment Index (HPSI) decreased in September by 1.2 points to 74.5. The HPSI is down 6.5 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 32% to 28%, while the percentage who say it is a bad time to buy increased from 63% to 66%. As a result, the net share of those who say it is a good time to buy decreased 7 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 73% to 74%, while the percentage who say it’s a bad time to sell remained unchanged at 19%. As a result, the net share of those who say it is a good time to sell increased 1 percentage point month over month.

Home Price Expectations: The percentage of respondents who say home prices will go up in the next 12 months decreased from 40% to 37%, while the percentage who say home prices will go down remained unchanged at 24%. The share who think home prices will stay the same increased from 31% to 33%. As a result, the net share of Americans who say home prices will go up decreased 3 percentage points month over month.

Mortgage Rate Expectations: The percentage of respondents who say mortgage rates will go down in the next 12 months increased from 6% to 8%, while the percentage who expect mortgage rates to go up decreased from 53% to 51%. The share who think mortgage rates will stay the same decreased from 35% to 33%. As a result, the net share of Americans who say mortgage rates will go down over the next 12 months increased 4 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 decreased from 82% to 81%, while the percentage who say they are concerned increased from 15% to 16%. As a result, the net share of Americans who say they are not concerned about losing their job decreased 2 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 increased from 26% to 27%, while the percentage who say their household income is significantly lower increased from 12% to 13%. The percentage who say their household income is about the same decreased from 59% to 57%. 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 most detailed consumer attitudinal survey of its kind, Fannie Mae’s National Housing Survey (NHS) polled approximately 1,000 respondents 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). 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 September 2021 National Housing Survey was conducted between September 1, 2021 and September 26, 2021. 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 September 2021 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.

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