The Fannie Mae (OTCQB: FNMA) Home Purchase Sentiment Index® decreased 2.7 points in October to 88.8, further retreating from the survey high set in August. Still, the HPSI is 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 VP 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