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Housing Sentiment at Record High as Consumers' Confidence in Home-Selling Environment Strengthens

Staff Report

Tuesday, July 11th, 2017

The Fannie Mae Home Purchase Sentiment Index increased 2.1 percentage points in June to 88.3, matching the all-time high from February of this year. The rise can be attributed to increases in four of the six HPSI components. The net share who reported that now is a good time to sell a home reached a new record high, increasing an additional 7 percentage points, outpacing the net 3 percentage point increase of Americans who reported that now is a good time to buy a home. As a result, the net share who say it's a good time to sell compared to those saying it's a good time to buy widened once again this month, which continues to indicate a potential seller's market. Americans also expressed greater belief that mortgage rates will go down over the next 12 months, with that component increasing 3 percentage points. Finally, the net share of consumers who think home prices will go up increased by 6 percentage points this month.

"The June HPSI reading matches the previous record set in February and reflects the trend toward a sellers' market that respondents indicated last month," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "Consumers are also growing more optimistic about their ability to get a mortgage, and lenders expect credit standards to ease further going forward, as shown in our Mortgage Lender Sentiment Survey. While consumer optimism on this metric is as high as we've seen in the survey's seven-year history, it's worth noting that this record is relative to the fairly tight standards in place post-crisis when we started collecting National Housing Survey data. Nevertheless, in the face of very tight housing supply, easing credit standards may fail to have the desired effect and could have the unintended consequence of fueling further house price increases."

HOME PURCHASE SENTIMENT INDEX – COMPONENT HIGHLIGHTS

Fannie Mae's 2017 Home Purchase Sentiment Index increased in June by 2.1 percentage points to 88.3. The HPSI is up 5.1 percentage points compared with the same time last year.

  • The net share of Americans who say it is a good time to buy a home increased 3 percentage points to 30%.

  • The net percentage of those who say it is a good time to sell increased by 7 percentage points to 39%, rising to a new survey high for the second consecutive month.

  • The net share of Americans who say that home prices will go up increased by 6 percentage points in June to 46% after declining in May.

  • The net share of those who say mortgage rates will go down over the next twelve months rose 3 percentage points to -49%, following the trend from the last two months.

  • The net share of Americans who say they are not concerned about losing their job fell 5 percentage points to 66%, declining further from last month.

  • The net share of Americans who say their household income is significantly higher than it was 12 months ago fell 1 percentage point in June to 17%.