A growing optimism among homebuyers especially on home prices remaining stable has spurred the numbers on Fannie Mae’s Home Purchase Sentiment Index (HPSI) to rise 2.5 points in March to 88.3. Compared to the same period a year ago, the index increased 3.8 points.
The monthly HPSI distills information about consumers’ home purchase sentiment from Fannie Mae’s National Housing Survey into a single number and reflects consumers’ current views as well as future expectations of housing market conditions.
According to the data released for March consumer sentiment became positive on home buying, selling, and prices. The net share of respondents who said that now was a good time to buy, increased 10 percentage points to 32 percent compared to February; the share of respondents who reported that now was a good time to sell also increased by 3 percentage points to 39 percent during the same period and matched the survey high of June 2017.
The number of respondents who said that mortgage rates would decrease over the next 12 months also rose 5 percentage points in March to 52 percent. On the other hand, the number of respondents who said that home prices would increase over the next 12 months, decreased 3 percentage points in March to 42 percent.
“The HPSI’s recent run of volatility continued in March, as it recovered last month’s loss and remained within the five-point range of the past twelve months,” said Doug Duncan, SVP and Chief Economist at Fannie Mae. “The primary driver of this month’s increase was the sizable rise in the net share of consumers who think it’s a good time to buy a home, which returned the indicator to its year-ago level. On the whole, a slight majority of consumers continue to express optimism regarding the overall direction of the economy.”
The HPSI data, which also looks at consumer sentiment on overall economic indicators found that consumer sentiment on jobs and wages remained unchanged with 71 percent of the respondents saying that they were not concerned about losing their jobs and 17 percent saying that their household income was significantly higher than it was last year.