In addition to providing 30 year fixed rate mortgages and affordable rental housing for millions of U.S. residents, Fannie Mae also conducts a detailed survey about housing sentiment that is closely watched by real estate and economic experts. That survey is known as the Fannie Mae Home Purchase Sentiment Index or HPSI for short.
The results for January’s HPSI are in and considering the volatile political climate, they have taken a surprising turn for the better. The HPSI climned 2 percentage points in January to 82.7. That ends the downward trend the HPSI observed over the last five months. In fact, two-thirds of the main survey questions that make up the HPSI were up in January.
The amount of Americans who feel that home prices will rise over the next year was up 7 percentage points. Survey respondents were also more optimistic about their incomes. Those who answered that they’ve experienced significantly higher household income in the past 12 months rose by 5 percentage points.
When asked if it was a good time to buy and sell their home, the net percentage of those who say that it is a good time to sell a house rose by 2 percentage points, while the net share of those who say it is a good time to buy a house fell by 3 percentage points. Overall, consumers also demonstrated more confidence related to job security. The net share of those who think mortgage rates will drop remained unchanged, despite mortgage rates having risen in the previous month.
“Three months after the presidential election, measures of consumer optimism regarding personal financial prospects and the economy are at or near the highest levels we’ve seen in the nearly seven-year history of the National Housing Survey,” said senior vice president and Fannie Mae’s chief economist, Doug Duncan.
“However, any significant acceleration in housing activity will depend on whether consumers’ favorable expectations are realized in the form of income gains sufficient to offset constrained housing affordability. If consumers’ anticipation of further increases in home prices and mortgage rates materialize over the next 12 months, then we may see housing affordability tighten even more,” Duncan added.
Here are some more highlights and specific numbers from the Januaryar 2017 Home Purchase Sentiment Index Highlights
Fannie Mae’s 2017 Home Purchase Sentiment Index (HPSI) increased in January by 2 percentage points to 82.7. The HPSI is up 1.2 percentage points compared with the same time last year.
The net share of Americans who say it is a good time to buy a house fell by 3 percentage points to 29%, matching the survey low from May and September 2016.
The net percentage of those who say it is a good time to sell rose by 2 percentage points to 15%.
The net share of Americans who say that home prices will go up increased by 7 percentage points in January to 42%.
The net share of those who say mortgage rates will go down over the next 12 months remained constant this month at -55%.The net share of Americans who say they are not concerned about losing their job rose 1 percentage point to 69%.
The net share of Americans who say their household income is significantly higher than it was 12 months ago rose 5 percentage points to 15% in January, reversing the drop in December.
It will certainly be interesting to see how the overall economy and the real estate market respond to our current political climate. We will keep you updated on further HPSI results as they come in throughout the year as well as any other major real estate market indicators.
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