The Fannie Mae Home Purchase Sentiment Index® (HPSI) fell 1.5 points to 85.0 in August but continued its gradual climb upward from the same period last year.
Four of the six HPSI components decreased during the month, most notably the share of consumers who expect home prices to go up in the next 12 months and the share who say now is a good time to sell a home – decreasing 6 and 5 percentage points in August, respectively. Additionally, more consumers reported a positive employment outlook from the previous month, up 4 percentage points in August, and those reporting significantly higher household income fell 1 percentage point. Overall, consumer housing sentiment remains positive and bodes well for continued growth in housing activity.
"Consumers have a fairly optimistic 12-month outlook on housing at the end of the summer home-buying season, supported by increased job confidence and more favorable expectations regarding their personal financial situations compared with this time last year," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "The return to a slight upward trend in the HPSI during the spring and summer is, thus far, in line with our forecast, which calls for 4% growth in home sales in 2016 to the best level since 2006 and continued improvement for 2017."
The HPSI decreased 1.5 points in August to 85.0 after an all-time high in July. Overall, the HPSI is up 4.2 points since this time last year.
- Increasing for the third consecutive month, the net share of Americans who say it is a good time to buy a house rose by 1 percentage point to 34%.
- The net percentage of those who say it is a good time to sell fell 5 percentage points from an all-time high in July to 15%.
- The net share of Americans who say that home prices will go up fell 6 percentage points from last month to 35%.
- The net share of those who say mortgage rates will go down over the next year fell 2 percentage points to -38%, after increasing for the past three months.
- The net share of Americans who say they are not concerned with losing their job rose 4 percentage points to 73%.
- The net share of Americans who say their household income is significantly higher than it was 12 months ago fell 1 percentage point to 10%, stabilizing after June's steep fall.