The share of consumers who expected mortgage rates to decrease this year dropped by four percentage points.
The share who deemed their household income to be somewhat higher versus last year was down by five points.
It’s not all bad news, however. The share of Americans who think it is a good time to purchase a house went up by two percentage points, and the share of consumers who were confident about keeping their jobs increased by four percentage points.
“Despite the post-election bump in general consumer attitudes, a rapid rise in mortgage rate expectations has tamped down home purchase sentiment, at least in the near term. A spike in economic optimism in the immediate aftermath of an election is typical. Whether consumers will sustain this level of optimism into 2017 remains unclear,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The spike in interest rates reflects, in part, the market’s anticipation of pro-growth policies from the incoming Administration. If this optimism comes to fruition, it should translate into stronger income growth and increased job security for consumers – the two HPSI components that could help support housing sentiment this year.”
Morning Briefing: Mortgage insurance premiums are coming down
December proved to be another month of decline for homebuyer sentiment, with the Fannie Mae Home Purchase Sentiment Index decreasing for the fifth straight month. Homebuyer sentiment dropped by 0.5 points to 80.7, according to Fannie Mae.