The Fannie Mae Home Purchase Sentiment Index (HPSI) remained unchanged at 71.9 in April, showing signs of plateauing as consumers adjust to higher prices and rates. While the full index is up 5.1 points year over year, the share of respondents who expect mortgage rates to go down over the next 12 months fell to 26%.

“The HPSI, unchanged this month, may have hit another plateau as consumers maintain their ‘wait and see’ approach to the housing market,” says Doug Duncan, Fannie Mae senior vice president and chief economist. “Overall, housing sentiment increased from November through February, driven largely by consumer belief that mortgage rates would move lower. However, recent data showing stickier-than-expected inflation, rising mortgage rates, and continued home price appreciation appear to have given consumers pause regarding the market’s direction.”
According to the index, respondents who say it is a good time to buy a home decreased from 21% to 20%, while the percentage who say it is a bad time to buy remained unchanged at 79%.
Respondents who say it is a good time to sell a home increased from 66% to 67%, while the percentage who say it’s a bad time to sell decreased from 34% to 32%.
“While only 20% of consumers think it’s a good time to buy a home, 67% think it’s a good time to sell one, a share that’s moved steadily upward since the start of the year. We think consumers’ generally improved sense of home selling conditions bodes well for listings and housing activity, particularly for the segment of the population who may need to move for lifestyle reasons and have already begun adjusting their financial expectations to the current mortgage rate and price environment,” says Duncan.
“However, for potential home buyers in less of a rush to transact, ongoing affordability challenges may continue to keep many of them on the sidelines—one reason why we expect home sales to tick up only gradually over the course of the year.”
Those who think home prices will go up in the next 12 months increased from 40% to 42%, and the percentage who say home prices will go down decreased from 20% to 18%. Those who think home prices will stay the same increased from 38% to 39%, resulting in the net share of those who say home prices will go up in the next 12 months increasing 3 percentage points month over month.
Mortgage rates are still heavy on consumers' minds as those who say rates will go down in the next 12 months decreased from 29% to 26%, and those who expect rates to go up decreased from 34% to 33%. The percentage who think rates will stay the same increased from 36% to 40%. Month over month, the net share of those who say mortgage rates will go down over the next 12 months decreased 1 percentage point.
Respondents who say they are not concerned about losing their job in the next 12 months decreased from 77% to 76%, while the those who say they are concerned remained unchanged at 23%. In terms of household income, respondents who say their household income is significantly higher than it was 12 months ago decreased from 19% to 17% in April. The percentage who says their household income is significantly lower remained unchanged at 12%, and the percentage who say their income is about the same increased from 68% to 70%.