Fannie Mae’s Home Purchase Sentiment Index weakened in September as the mortgage rate and household income components decreased.
The overall reading of 87.7 was a 0.3 point decline from August, although the net share of buyers who said it was a good time to buy rose 5 points; and the net share of sellers who thought it was a good time to sell was unchanged.
But, the net share who expect mortgage rates to go down over the next 12 months fell 4 percentage points to -56%; while the net share of those who said their household income is significantly higher than it was 12 months ago decreased 3 percentage points to 19%.
Strong economy offsetting downside risk
"In September, the average 30-year fixed mortgage rate increased for the second consecutive month to 4.63%, its highest level since May 2011,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.
Duncan noted that the Fed’s September meeting continued to point to four additional rate increases between now and the end of 2019 but he also acknowledged that the downside risk to housing is limited by broader economic strength, which helped boost perceptions of current home buying conditions.
“For consumers who say now is a good time to buy, the share citing overall economic conditions as a reason rose to a survey high," he added.
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