The Fannie Mae Home Purchase Sentiment Index® (HPSI) decreased 2.7 points in October to 88.8, further retreating from the survey high set in August, but remained up 3.1 points compared to the same time last year.
Five of the six HPSI components decreased month over month, including a net 7-percentage point drop in the “Good Time to Buy” component and a net 5-percentage point drop in the “Household Income is Significantly Higher” component.
“Consumer home purchase sentiment remains robust, with the HPSI still near its survey high despite dipping for a second consecutive month,” said Doug Duncan, senior vice president and chief economist. “The ‘good time to buy’ component has declined notably, despite low mortgage rates, due in part to the persistent challenge of a lack of affordable housing supply. In turn, the net share of consumers expecting home prices to increase over the next 12 months has fallen to its lowest reading in seven years. Still, low mortgage rates and a strong labor market are supporting the index’s overall strength, which is consistent with our expectation for a modest expansion in home purchase activity in the fourth quarter.”
HOME PURCHASE SENTIMENT INDEX – COMPONENT HIGHLIGHTS
- The net share of Americans who say it is a good time to buy decreased 7 percentage points to 21%.
- The net share of those who say it is a good time to sell fell 3 percentage points to 41%.
- The net share of Americans who say home prices will go up fell 2 percentage points to 27%, continuing the decline that started in June.
- The net share of Americans who say mortgage rates will go down over the next 12 months fell 2 percentage points to -25%.
- The net share of Americans who say they are not concerned about losing their job increased 3 percentage points to 72%.
- The net share of those who say their household income is significantly higher than it was 12 months ago fell 5 percentage points to 16%.