The Fannie Mae Home Purchase Sentiment Index®(HPSI) decreased in December, falling 2.7 points to 83.5, resuming its recent downward trend after November's slight uptick.
Fannie said the decrease can be attributed primarily to a 12-percentage point decrease in the net share of Americans who said it is a good time to buy a home. The net share of Americans who said it is a good time to sell a home increased 1 percentage point. Respondents reporting significantly higher income over the past twelve months fell 5 percentage points on net, erasing last month's gains, while the net share expressing greater job confidence increased 2 percentage points. Finally, the net share of respondents who expect home prices to go up fell 2 percentage points, and the net share who expect mortgage rates to go down remained unchanged.
"Consumer attitudes regarding whether it's a good time to buy a home worsened significantly in the last month, as well as from a year ago, to a survey low," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "Although home price growth slowed in 2018, the cumulative impact of sustained, robust increases in home prices outpacing income growth likely helped drive the share of consumers citing high home prices as a primary reason for a bad time to buy a home to a survey high. Meanwhile, consumers' views on the direction of the economy, a key support for housing market sentiment of late, has softened somewhat from its October high. Looking ahead, consumers expect the pace of home price growth to slow over the course of 2019, which may temper growing concern over housing affordability."
HOME PURCHASE SENTIMENT INDEX – COMPONENT HIGHLIGHTS
Fannie Mae's 2018 Home Purchase Sentiment Index (HPSI) decreased in December by 2.7 points to 83.5. The HPSI is down 2.3 points compared with the same time last year.