The Fannie Mae (OTCQB: FNMA) Home Purchase Sentiment Index^® (HPSI) increased 0.4 points in November to 75.0, continuing its sharp upward trend over the past year as consumers appear to be acclimating to the higher mortgage rate and home price environment. This month, a new record-high share of consumers indicated that they expect mortgage rates to decline over the next 12 months, while fewer respondents said they expect home prices to rise. While only 23% believe it's a "good time to buy a home," on net that component continued its upward trend, and is now notably higher than last November's share of 14%. The share of respondents saying it's a "good time to sell" remained flat month over month but is also up from last year. Year over year, the HPSI is up 10.7 points.

"Over the past year, we have seen a significant improvement in general consumer sentiment toward the housing market, largely driven by increased optimism that mortgage rates will fall and improved perceptions of both homebuying and home-selling conditions," said Mark Palim, Fannie Mae Senior Vice President and Chief Economist. "Notably, this improvement in sentiment continues a trend that began about two and a half years ago following the sizeable run-up in home prices during the pandemic, and it is likely due in part to consumers' slow-but-steady acclimation to current market conditions. Of course, high home prices and high mortgage rates remain the primary reasons why the vast majority of consumers think it's a 'bad time to buy' — trends that we expect to continue into the new year."

Palim continued: "Fortunately, a sharply growing share of consumers say they expect their personal financial situation to improve over the next year. Additionally, more consumers expect home price growth to slow, a belief recently shared by our expert panelists, as well, which may help ease some of the affordability burden and incentivize some households, especially those who have been waiting in the wings, to finally act on their home purchase decision."

Home Purchase Sentiment Index – Component Highlights

Fannie Mae's Home Purchase Sentiment Index (HPSI) increased 0.4 points in November to 75.0. The HPSI is up 10.7 points compared to the same time last year. Read the full research report for additional information.

• Good/Bad Time to Buy: The percentage of respondents who say it is a good time to buy a home increased from 20% to 23%, while the percentage who say it is a bad time to buy decreased from 80% to 77%. As a result, the net share of those who say it is a good time to buy increased 6 percentage points month over month to negative 54%.

• Good/Bad Time to Sell: The percentage of respondents who say it is a good time to sell a home remained unchanged at 64%, while the percentage who say it's a bad time to sell also remained unchanged at 35%. As a result, the net share of those who say it is a good time to sell remained unchanged month over month at 29%.

• Home Price Expectations: The percentage of respondents who say home prices will go up in the next 12 months decreased from 39% to 38%, while the percentage who say home prices will go down increased from 23% to 25%. The share who think home prices will stay the same decreased from 38% to 36%. As a result, the net share of those who say home prices will go up in the next 12 months decreased 5 percentage points month over month to 12%.

• Mortgage Rate Expectations: The percentage of respondents who say mortgage rates will go down in the next 12 months increased from 39% to 45%, while the percentage who expect mortgage rates to go up increased from 22% to 25%. The share who think mortgage rates will stay the same decreased from 38% to 29%. As a result, the net share of those who say mortgage rates will go down over the next 12 months increased 4 percentage points month over month to 20%.

• Job Loss Concern: The percentage of employed respondents who say they are not concerned about losing their job in the next 12 months decreased from 79% to 78%, while the percentage who say they are concerned remained unchanged at 20%. As a result, the net share of those who say they are not concerned about losing their job remained unchanged month over month at 58%.

• Household Income: The percentage of respondents who say their household income is significantly higher than it was 12 months ago decreased from 18% to 16%, while the percentage who say their household income is significantly lower increased from 11% to 12%. The percentage who say their household income is about the same increased from 70% to 71%. As a result, the net share of those who say their household income is significantly higher than it was 12 months ago decreased 1 percentage point month over month to 5%.