Positive views on the economy continued to offset cooling housing sentiment
Home purchase sentiment among consumers improved in November with perceptions of income growth reaching a survey high in Fannie Mae’s Home Purchase Sentiment Index (HPSI).
The HPSI increased slightly, rising 0.5 points to 86.2. Fannie Mae said the increase can be attributed primarily to an increase in the net share of Americans who reported significantly higher income, which hit a new survey high after jumping five percentage points.
“The HPSI has moved within a tight range over the past five months, as positive sentiment regarding the overall economy continued to offset cooling housing sentiment,” Fannie Mae Chief Economist Doug Duncan said. “Consumers’ perceptions of growth in their household income reached a survey high this month, helping to absorb some of the impact of increasing mortgage rates on housing market activity. Meanwhile, the net share of consumers expecting home prices to increase over the next 12 months continues to moderate, dropping by 13 percentage points since this time last year.”
Fannie Mae also found a two-percentage-point increase in the net share of Americans who said it is a good time to buy a home. The net share of those who said it is a good time to sell a home remained unchanged.
Meanwhile, the net share of respondents who expect home prices to go up fell four percentage points. The net share who expressed greater job confidence fell one percentage point. Finally, the net share of those who expect mortgage rates to go down increased one percentage point.