The strength of the US labor market, confirmed by Friday’s figures which showed a 201,000 rise in jobs in August and a 2.9% year-over-year rise in wages, has given a boost to a key housing market index.
Fannie Mae’s Home Purchase Sentiment Index gained 1.5 points to 88.0 in August, the first increase since May.
The components tracking job security and income were the drivers of the increase with the net share of those unconcerned about losing their jobs at 15% (in July it dropped 11%). There was a 1 percentage point gain for the net share reporting an income increase over the past 12 months.
"Consumers are attuned to the divergence between the slowing housing market and strong macro economy," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "Consumers were less optimistic this month about both homebuying and home selling conditions, while perceptions of income growth and confidence about job security are at survey highs. After years of robust home price growth outpacing income growth, consumers face significant housing affordability challenges at the low end of the market."
Not a good time to buy or sell
Despite positivity in their own circumstances, the net shares of both those who say now is good time to sell a home (38%) and those who think it’s a good time to buy (21%), both declined 3 percentage points.
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