Housing sentiment sets new record amid job security, rates

by Steve Randall08 Aug 2019

Five of the six components of the Fannie Mae Home Purchase Sentiment Index gained in July, boosting the index to a new high.

The index posted a reading of 93.7, up 2.2 points from June, driven by an 8-point net increase in the “Confidence About Not Losing Job component. This component gained 16 percentage points year-over-year while “Mortgage Rates Will Go Down” saw a 24-point annual gain and the overall index was up 7.2 points from July 2018.

"Consumer job confidence and favorable mortgage rate expectations lifted the HPSI to a new survey high in July, despite ongoing housing supply and affordability challenges," said Doug Duncan, Senior Vice President and Chief Economist. "Consumers appear to have shaken off a winter slump in sentiment amid strong income gains. Therefore, sentiment is positioned to take advantage of any supply that comes to market, particularly in the affordable category. However, recent financial market events following when the survey data were collected could weigh on consumer views looking ahead."

The only component of the index that saw a month-over-month decrease was the net share who said home prices will go up over the next 12 months.

More stats

  • The net share of Americans who say it is a good time to buy a home increased 3 percentage points to 26%. This component is up 2 percentage points from the same time last year.
  • The net share of those who say it is a good time to sell a home increased 1 percentage point to 44%. This component is up 3 percentage points from the same time last year.
  • The net share of those who say home prices will go up over the next 12 months decreased 1 percentage points to 37%. This component is down 2 percentage points from the same time last year.
  • The net share of Americans who say mortgage rates will go down over the next 12 months increased 1 percentage points to -28%. This component is up 24 percentage points from the same time last year.
  • The net share of Americans who say they are not concerned about losing their job over the next 12 months increased 8 percentage points to 81%. This component is up 16 percentage points from the same time last year.
  • The net share of those who say their household income is significantly higher than it was 12 months ago increased 1 percentage point to 21%. This component is unchanged from the same time last year.

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