WASHINGTON, DC - The Fannie Mae Home Purchase Sentiment Index® (HPSI) increased 0.3 points in September to 88.3, matching the all-time high set in June. The rise can be attributed to increases in three of the six HPSI components.
The good time to buy component rose the most month-over-month, with the net share increasing 10 percentage points compared to August. Renter respondents, in particular, buoyed the net good time to buy component, showing a substantial upward change in optimism in September. The net share who reported that now is a good time to sell a home rose 2 percentage points in September and is now up 23 percentage points compared to the same period last year. Meanwhile, the net share who said home prices will go up in the next 12 months fell 8 percentage points.
Even so, respondents continue to cite high home prices as the most important reason behind the bad time to buy and good time to sell indicators. The net share of those who believe mortgage rates will go down decreased 2 percentage points.
Americans also expressed a slightly increased sense of job security, with the net share who say they are not concerned about losing their job increasing 1 percentage point. Finally, the net share of consumers who reported that their income is significantly higher than it was 12 months ago fell by 1 percentage point.
"The biggest driver for the increase in the HPSI is the rebound in the good time to buy sentiment, which outweighed the largest drag—a sizable reduction in the net share of consumers expecting home prices to rise over the next year," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "Details in the survey showed a meaningful pickup in the good time to buy component, especially from the renter respondents. Additionally, perceptions of easing inventory helped boost the net share saying that now is a good time to buy, which is consistent with less bullish home price appreciation sentiment during the month. Overall, we believe that the devastating impacts of the hurricanes will likely weigh on home sales in coming months, posing downside risks for our forecast, which already calls for only a modest gain in home sales this year."
HOME PURCHASE SENTIMENT INDEX – COMPONENT HIGHLIGHTS
Fannie Mae's 2017 Home Purchase Sentiment Index (HPSI) increased in September by 0.3 points to 88.3. The HPSI is up 5.5 points compared with the same time last year.
The net share of Americans who say it is a good time to buy a home rose 10 percentage points to 28%, reversing the decreasing trend of the last two months.
The net percentage of those who say it is a good time to sell increased by 2 percentage points to 38%, 1 percentage point away from the survey high of 39%.
The net share of Americans who say that home prices will go up decreased by 8 percentage points in September to 40%, breaking from the upward trend earlier this quarter.
The net share of those who say mortgage rates will go down over the next twelve months fell 2 percentage points to -47%.
The net share of Americans who say they are not concerned about losing their job rose by 1 percentage point to 75%.
The net share of Americans who say their household income is significantly higher than it was 12 months ago fell 1 percentage point from August to 15%.
The Home Purchase Sentiment Index (HPSI) distills information about consumers' home purchase sentiment from Fannie Mae's National Housing Survey (NHS) into a single number. The HPSI reflects consumers' current views and forward-looking expectations of housing market conditions and complements existing data sources to inform housing-related analysis and decision making. The HPSI is constructed from answers to six NHS questions that solicit consumers' evaluations of housing market conditions and address topics that are related to their home purchase decisions. The questions ask consumers whether they think that it is a good or bad time to buy or to sell a house, what direction they expect home prices and mortgage interest rates to move, how concerned they are about losing their jobs, and whether their incomes are higher than they were a year earlier.