The Fannie Mae (OTCQB: FNMA) Home Purchase Sentiment Index® (HPSI)fell 11.7 points to 80.8 in March, its lowest reading since December 2016. Five of the six HPSI components decreased month over month, including the percentage of Americans expressing concern about losing their job within the next 12 months. Consumers also reported that homebuying and home-selling conditions have worsened and took a more pessimistic view of home price growth. Year over year, the HPSI is down 9.0 points.
“In March, the HPSI dropped to its lowest level since December 2016, with Americans reporting greater concern about their job security than at any point in the last six years,” said Doug Duncan, Senior Vice President and Chief Economist. “Attitudes about the current home-selling environment deteriorated markedly, falling to their lowest level since January 2017. A survey record one-month drop in optimism about the direction of the economy appears to have weakened consumers’ views of both the current home-selling and homebuying environment, though the latter is likely buffered in part by low mortgage rates. When asked why it’s a bad time to buy or sell a home, approximately 7% of consumers offered COVID-19 as an unprompted response, one of the highest percentages of non-standard answers in the survey’s history. We expect these developments to weigh heavily on housing activity during the spring/summer homebuying season.”
Home Purchase Sentiment Index – Component Highlights
Fannie Mae’s Home Purchase Sentiment Index (HPSI) decreased in March by 11.7 points to 80.8. The HPSI is down 9.0 points compared to the same time last year. Read the full research report for additional information.
- Good/Bad Time to Buy: The percentage of Americans who say it is a good time to buy decreased from 59% to 56%, while the percentage who say it is a bad time to buy increased from 32% to 36%. As a result, the net share of Americans who say it is a good time to buy decreased 7 percentage points.
- Good/Bad Time to Sell: The percentage of Americans who say it is a good time to sell decreased from 67% to 52%, while the percentage who say it’s a bad time to sell increased from 22% to 36%. As a result, the net share of those who say it is a good time to sell decreased 29 percentage points.
- Home Price Expectations: The percentage of Americans who say home prices will go up in the next 12 months decreased this month from 47% to 39%, while the percentage who said home prices will go down increased from 8% to 22%. The share who think home prices will stay the same decreased from 38% to 32%. As a result, the net share of Americans who say home prices will go up decreased 22 percentage points.
- Mortgage Rate Expectations: The percentage of Americans who say mortgage rates will go down in the next 12 months increased this month from 8% to 20%, while the percentage who expect mortgage rates to go up increased from 38% to 39%. The share who think mortgage rates will stay the same decreased from 46% to 33%. As a result, the net share of Americans who say mortgage rates will go down over the next 12 months increased 11 percentage points.
- Job Concerns: The percentage of Americans who say they are not concerned about losing their job in the next 12 months decreased from 85% to 77%, while the percentage who say they are concerned increased from 13% to 23%. As a result, the net share of Americans who say they are not concerned about losing their job decreased 18 percentage points.
- Household Income: The percentage of Americans who say their household income is significantly higher than it was 12 months ago decreased from 32% to 27%, while the percentage who say their household income is significantly lower remained the same at 11%. The percentage who say their household income is about the same increased from 56% to 61%. As a result, the net share of those who say their household income is significantly higher than it was 12 months ago decreased 5 percentage points.
