Consumer Confidence in Housing Remains Near All-Time High Despite Slight Dip
Consumer Confidence in Housing Remains Near All-Time High Despite Slight Dip
Fifty-Nine Percent of Americans Believe It’s a Good Time to Buy a Home
The Fannie Mae (OTCQB: FNMA) Home Purchase Sentiment Index® (HPSI) dipped slightly in February, decreasing 0.5 points to 92.5 but remaining near its survey high of 93.8. Three of the six HPSI components decreased month over month, including the percentage of Americans who believe that now is a good time to buy a home. Year over year, the HPSI is up 8.2 points, reflecting in part consumers’ more favorable mortgage rate expectations, despite that index component moderating this month.
“The HPSI remained relatively steady in February, reflecting another month of robust consumer sentiment consistent with strong housing market data to start the year,” said Doug Duncan, Senior Vice President and Chief Economist. “In particular, household income sentiment picked back up as more workers saw their wages rise amid tight labor market conditions, helping bolster already strong housing demand. Though American consumers’ optimism about the direction of the economy is higher this month than at any point in the survey’s nearly ten-year history, the late February stock market decline, precipitated in part by evolving expectations of the potential economic impact of the coronavirus, is not fully reflected in this month’s results due to the timing of our survey data collection, which ended February 22. We may see some volatility in sentiment in the months ahead as these circumstances play out.”
Home Purchase Sentiment Index – Component Highlights
Fannie Mae’s Home Purchase Sentiment Index (HPSI) decreased in February by 0.5 points to 92.5. The HPSI is up 8.2 points compared to the same time last year. Read the full research report for additional information.
Good/Bad Time to Buy: The percentage of Americans who say it is a good time to buy remained the same this month at 59%, while the percentage who say it is a bad time to buy increased from 30% to 32%. As a result, the net share of Americans who say it is a good time to buy decreased 2 percentage points.
Good/Bad Time to Sell: The percentage of Americans who say it is a good time to sell increased from 66% to 67%, while the percentage who say it’s a bad time to sell increased from 21% to 22%. As a result, the net share of those who say it is a good time to sell stayed the same.
Home Price Expectations: The percentage of Americans who say home prices will go up in the next 12 months decreased this month from 48% to 47%, while the percentage who said home prices will go down increased from 7% to 8%. The share who think home prices will stay the same remained unchanged at 38%. As a result, the net share of Americans who say home prices will go up decreased 2 percentage points.
Mortgage Rate Expectations: The percentage of Americans who say mortgage rates will go down in the next 12 months increased this month from 7% to 8%, while the percentage who expect mortgage rates to go up increased from 33% to 38%. The share who think mortgage rates will stay the same decreased from 48% to 46%. As a result, the net share of Americans who say mortgage rates will go down over the next 12 months decreased 4 percentage points.
Job Concerns: The percentage of Americans who say they are not concerned about losing their job in the next 12 months decreased from 86% to 85%, while the percentage who say they are concerned decreased from 14% to 13%. As a result, the net share of Americans who say they are not concerned about losing their job remained unchanged.
Household Income: The percentage of Americans who say their household income is significantly higher than it was 12 months ago increased from 27% to 32%, while the percentage who say their household income is significantly lower remained the same at 11%. 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 5 percentage points.
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 2020 National Housing Survey was conducted between February 1, 2020 and February 22, 2020. 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 2020 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 Fannie Mae 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:
Opinions, analyses, estimates, forecasts, and other views of Fannie Mae’s Economic & Strategic Research (ESR) Group 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 as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.