The Fannie Mae (OTCQB: FNMA) Home Purchase Sentiment Index increased 2.7 points in November to 91.5, reversing the decline from last month and re-approaching the survey high set in August. The HPSI is up 5.3 points compared to the same time last year.

Three of the six HPSI components increased month over month, including large increases in the percentage of Americans who believe it's a good time to buy and that home prices will go up over the next 12 months.

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"Over the past year, a growing share of consumers say that they expect mortgage rates to remain steady," said Doug Duncan, senior VP and chief economist. "While low rates have helped boost housing affordability compared to last year, the HPSI has increased only moderately in that time frame. This may be due in part to the ongoing challenge of tight housing supply, especially in the starter home market. That lean supply means the recent mortgage rate decline – holding payment size constant – allows borrowers to increase bid prices for homes. As a result, home prices are propelled higher, mitigating the benefit of lower borrowing costs for many borrowers. Additionally, a rising savings rate suggests that consumers could be growing more financially conservative. Looking ahead, we continue to expect a steady but modest pace of growth in home purchase activity."

HOME PURCHASE SENTIMENT INDEX – COMPONENT HIGHLIGHTS

  • Good/Bad Time to Buy: The percentage of Americans who say it is a good time to buy increased this month from 57% to 61%, while the percentage who say it is a bad time to buy decreased from 36% to 29%. As a result, the net share of Americans who say it is a good time to buy increased 11 percentage points and is the highest it's been since March 2018.
  • Good/Bad Time to Sell: The percentage of Americans who say it is a good time to sell decreased this month from 67% to 66%, while the percentage who say it's a bad time to sell remained flat at 26%. As a result, the net share of those who say it is a good time to sell fell 1 percentage point.
  • Home Price Expectations: The percentage of Americans who say home prices will go up in the next 12 months increased this month from 41% to 44%, while the percentage who said home prices will go down decreased from 14% to 10%. The share who think home prices will stay the same increased from 39% to 40%. As a result, the net share of Americans who say home prices will go up increased 7 percentage points.
  • Mortgage Rate Expectations: The percentage of Americans who say mortgage rates will go down in the next 12 months decreased this month from 12% to 11%, while the percentage who say mortgage rates will go up increased from 37% to 39%. The share who think mortgage rates will stay the same increased from 44% to 42%. The net share of Americans who say mortgage rates will go down over the next 12 months fell 3 percentage points.
  • Job Concerns: The percentage of Americans who say they are not concerned about losing their job in the next 12 months remained flat at 86%, while the percentage who say they are concerned also remained flat at 14%. As a result, the net share of Americans who say they are not concerned about losing their job did not change.
  • Household Income: The percentage of Americans who say their household income is significantly higher than it was 12 months ago remained the same at 28%, while the percentage who say their household is significantly lower decreased from 12% to 10%. The percentage who say their household income is about the same increased from 59% to 60%. As a result, the net share of those who say their household income is significantly higher than it was 12 months ago increased 2 percentage points.