Fannie’s Home Purchase Sentiment Index dropped 2.5 points to 80.2 in March, with four of the HPSI’s six components falling. The largest drop was in the net share of consumers who think it’s a good time to sell a home; that component of the HPSI plummeted by eight percentage points. And despite a recent Bureau of Labor Statistics report showing strong job growth, consumers are more pessimistic about the economy as a whole. Survey respondents’ confidence about not losing their job fell seven percentage points in March, according to Fannie Mae. The household income component also fell, with fewer consumers reporting that their income was significantly higher than it was 12 months ago.
“Growing pessimism over the last three months about the direction of the economy seems to be spilling over into home purchase sentiment,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The gap between the share of consumers who think the economy is on the wrong track and the share who think it is on the right track has widened, nearly matching its reading last August, when concerns regarding China and oil prices led to the biggest stock market plunge in years. In turn, we saw dips this month in income growth perceptions, attitudes about the home selling climate, and job confidence, all of which contributed to the lowest HPSI reading in the last year and a half. These declines seem to be at odds with recent news of solid overall job creation, but may reflect weakening economic performance in certain industries.”
Among other findings were:
- The net percentage of those who say it’s a good time to buy a house fell two percentage points.
- The net share of consumers who think home prices will go up rose one percentage point to 34%.
- The net share of those who think mortgage interest rates will drop rose five percentage points.
Consumer confidence in home purchasing has fallen to an 18-month low, according to new data from Fannie Mae.