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After Steady Increase, Homebuying Confidence Shifts

money, house, affordable, housing, buyingFannie Mae's Home Purchase Sentiment Index (HPSI) [1] this month reported a 1.7 point decline in home-purchase sentiment following three consecutive months of increases, the researchers said. The HPSI stands at 80 points for November. Since last year at this time, the HPSI has dropped 11.5 points [2].

The decline in the HPSI can be attributed to net decreases in three components this month: mortgage rate outlook,
job loss concern, and buying conditions. Three components saw net increases: home price outlook, change in
household income, and selling conditions.

"The HPSI appears to have peaked for now as consumers continue to consider how COVID-19 impacts their ability to buy or sell a home," said Doug Duncan, Fannie Mae's Senior Vice President and Chief Economist. "This follows the HPSI's recovery of slightly more than half of the loss experienced during the first few months of the pandemic."

"Drilling down a bit, home purchase confidence has recovered more for homeowners than for renters, in part because homeowners have been less likely than renters to have had their jobs and finances impacted by the pandemic," Duncan continued. "Interestingly, the gap between the HPSI broken out by the homeowner and renter subgroups hit a survey high in August but, despite narrowing slightly, remains elevated and well above the survey average."

Some other highlights related to HPSI indicators for the month of November 2020 (access more info on the HPSI as well as the full research report [2] on Fanniemae.com).