Homebuyers were more optimistic about purchasing real estate in November, according to the latest data from Fannie Mae's Home Purchase Sentiment Index (HPSI) released on Friday.
The index, which reflects consumers’ current views and forward-looking expectations of housing market conditions, inched up slightly to 86.2 in November driven primarily by an increase in the net share of Americans who reported significantly higher income, Fannie Mae said in its report.
The net share of Americans who said that now was a good time to buy a home rose 2 percentage points while those who said that it was a good time to sell remained unchanged. One of the big HPSI movers during the month was consumer sentiment on home prices. The net share of consumers surveyed who expected home prices to go up fell 4 percentage points during the month.
"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," observed Doug Duncan, SVP and Chief Economist at Fannie Mae. "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."
Despite the current rising rate environment, the survey found that the net share of consumers who said mortgage rates would drop over the next 12 months rose 1 percentage point to -56 percent.
Looking at the larger economic indicators, the report indicated that the net share of Americans who said that their household income was significantly higher than it was 12 months ago rose 5 percentage points to 24 percent. "Consumers' perception of growth in their household income reached a survey high this month, helping to absorb some of the impacts of increasing mortgage rates on housing market activity," Duncan said.
However, job optimism fell slightly, with the net share of Americans who said they were not concerned about jobs falling 1 percentage point to 77 percent.
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