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GSE Survey: Homebuyer Confidence Continues to Wane

The Fannie Mae Home Purchase Sentiment Index (HPSI) decreased 2.0 points in June to 62.8, its second-lowest reading in a decade, according to their latest report. Surveyed consumers continue to express pessimism about homebuying conditions, with only 17% (down from 20%) of respondents reporting it’s a good time to buy a home, while the percentage of consumers who believe it’s a “Good Time to Sell” fell from 68% to 67% this month. 

As of July, the HPSI has declined every month since March and is now down 13 points since the beginning of the year. The last time the index rose 

“The HPSI has declined steadily for much of the year, as higher mortgage rates continue to take a toll on housing affordability,” said Doug Duncan, Fannie Mae SVP and Chief Economist. “Unfavorable mortgage rates have been increasingly cited by consumers as a top reason behind the growing perception that it’s a bad time to buy, as well as sell, a home. Additionally, consumers appear to be indicating that selling conditions are softening, as the ‘Good Time to Sell’ component has declined meaningfully over the past two months, and, on net, fewer consumers expect home prices to go up.” 

“With home price growth slowing, and projected to slow further, we believe consumer reaction to current housing conditions is likely to be increasingly mixed: Some homeowners may opt to list their homes sooner to take advantage of perceived high prices, while some potential homebuyers may choose to postpone their purchase decision believing that home prices may drop,” Duncan continued. “Overall, this month’s HPSI results appear to confirm our forecast for moderating home sales over the coming year.” 

Additional findings on the six major components of the HPSI include: 

  • Good/Bad Time to Buy: The percentage of respondents who say it is a good time to buy a home decreased from 20% to 17%, while the percentage who say it is a bad time to buy increased from 75% to 76%. As a result, the net share of those who say it is a good time to buy decreased 4 percentage points month over month. 
  • Good/Bad Time to Sell: The percentage of respondents who say it is a good time to sell a home decreased from 68% to 67%, while the percentage who say it’s a bad time to sell increased from 26% to 27%. As a result, the net share of those who say it is a good time to sell decreased 2 percentage points month-over-month. 
  • Home Price Expectations: The percentage of respondents who say home prices will go up in the next 12 months decreased from 44% to 39%, while the percentage who say home prices will go down increased from 27% to 30%. The share who think home prices will stay the same increased from 23% to 26%. As a result, the net share of Americans who say home prices will go up decreased 8 percentage points month over month. 
  • Mortgage Rate Expectations: The percentage of respondents who say mortgage rates will go down in the next 12 months increased from 5% to 6%, while the percentage who expect mortgage rates to go up remained unchanged at 67%. The share who think mortgage rates will stay the same remained unchanged at 21%. As a result, the net share of Americans who say mortgage rates will go down over the next 12 months increased 1 percentage point month over month. 
  • Job Loss Concern: The percentage of respondents who say they are not concerned about losing their job in the next 12 months remained unchanged at 78%, while the percentage who say they are concerned increased from 21% to 22%. As a result, the net share of Americans who say they are not concerned about losing their job decreased 1 percentage point month over month. 
  • Household Income: The percentage of respondents who say their household income is significantly higher than it was 12 months ago decreased from 25% to 24%, while the percentage who say their household income is significantly lower decreased from 16% to 13%. The percentage who say their household income is about the same increased from 58% to 61%. As a result, the net share of those who say their household income is significantly higher than it was 12 months ago increased 2 percentage points month over month. 

Click here to view the HPSI in its entirety. 

About Author: Kyle G. Horst

Kyle Horst
Kyle G. Horst is a reporter for DS News and MReport. A graduate of the University of Texas at Tyler, he has worked for a number of daily, weekly, and monthly publications in South Dakota and Texas. With more than 10 years of experience in community journalism, he has won a number of state, national, and international awards for his writing and photography. He most recently worked as editor of Community Impact Newspaper covering a number of Dallas-Ft. Worth communities on a hyperlocal level. Contact Kyle G. at [email protected]
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