Housing sentiment moved up for the first time since May, according to the August 2018 Home Purchase Sentiment Index (HPSI) from Fannie Mae, a distillation of consumers’ home purchase sentiment from Fannie Mae’s National Housing Survey. The HPSI was 88 points in August, up 1.5 points month over month, and unchanged year over year.
Fannie Mae notes that fewer survey respondents stated that now is a good time to buy a home, with the number who say now is a good time to buy dropping three percentage points to 21 percent, while the net share of those who say it is a good time to sell a home also dropped three percentage points, to 38 percent. Additionally, according to the survey, one percentage point fewer respondents, now at 38 percent, believe that housing prices will go up in the next twelve months.
“Consumers are attuned to the divergence between the slowing housing market and strong macro economy,” said Doug Duncan, SVP and Chief Economist at Fannie Mae. “Consumers were less optimistic this month about both homebuying and home selling conditions, while perceptions of income growth and confidence about job security are at survey highs. After years of robust home price growth outpacing income growth, consumers face significant housing affordability challenges at the low end of the market.”
According to Fannie Mae, the uptick in home purchase sentiment can be attributed to job- and income-related HPSI components, as 15 percentage points fewer Americans were afraid of losing their job as of August, a large recovery from July’s 11 point month over month decrease. This puts the share of those who are unafraid of losing their job at 80 percent, a record high for the survey.
The Index also found that the net share of survey respondents who said their household income is significantly higher than it was 12 months ago gained 1 percentage point.
Find the full report from Fannie Mae here.