HPSI Nears Survey High as More Americans Say It’s a Good Time to Buy and Sell
The Fannie Mae Home Purchase Sentiment Index® (HPSI) jumped 5.5 points in March to 89.8, reversing last month’s slight decline and reaching its highest point since June 2018. Increases in the “Good Time to Buy” and “Good Time to Sell” components drove the measure of consumer sentiment higher, with the two rising 7 and 13 percentage points, respectively. Complementing that rise, more consumers on net expect interest rates to fall within the next 12 months, as that component rose 7 percentage points this month.
“A brighter housing market outlook drove this month’s increase in the HPSI – a welcome sign from consumers as we enter the spring and summer homebuying seasons,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The results further corroborate the positive effect of falling mortgage rates on affordability, which we expect will help support a rebound in home sales.”
“Continuing a five-month trend, the net share of consumers who believe mortgage rates will go down increased 7 percentage points amid a 35 basis-point drop in mortgage rates in March alone,” continued Duncan. “Meanwhile, job confidence – little changed from last month’s survey high – also continues to support housing sentiment, while income growth perceptions firmed from both prior month and year-ago levels, potentially supporting an uptick in housing demand. Additionally, consumers appear to have regained some confidence in the housing market, with perceptions of both home buying and home selling conditions returning to their longer-term trends.”
HOME PURCHASE SENTIMENT INDEX – COMPONENT HIGHLIGHTS
Fannie Mae’s 2019 Home Purchase Sentiment Index (HPSI) increased in March by 5.5 points to 89.8. The HPSI is up 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 increased 7 percentage points to 22%. This component is down 10 percentage points from the same time last year.
- The net share of those who say it is a good time to sell a home increased 13 percentage points to 43%. This component is up 4 percentage points from the same time last year.
- The net share of those who say home prices will go up increased 5 percentage points to 38%. This component is down 4 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 7 percentage points to -45%. This component is up 7 percentage points from the same time last year.
- The net share of Americans who say they are not concerned about losing their job decreased 1 percentage point to 80%. This component is up 9 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 increased 2 percentage points to 20%. This component is up 3 percentage points 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 March 2019 National Housing Survey was conducted between March 2, 2019 and March 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 March 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.