Fannie Mae’s Home Purchase Sentiment Index (HPSI) decreased 2.2 points to 82.8 in September, moving further off of survey highs.
Consumer caution surfaced in the September HPSI, with four of the six components decreasing during the month. The largest decrease was seen in the net share of consumers who expect mortgage interest rates to decrease during the next 12 months, which fell 6 percent. This was followed by a 5 percent drop in the net share of consumers who say now is a good time to buy a home and a 3 percent drop in the net share of consumers reporting confidence about not losing their job during the next year.
Household Income was the only HPSI component to increase in September, with slightly more consumers than the previous month reporting that their household income is significantly higher than it was 12 months ago.
“The decline in the HPSI over the past two months from the survey high in July of 86.5 adds a note of caution to our moderately positive housing outlook,” says Doug Duncan, Fannie Mae’s senior vice president and chief economist. “Downside changes came in particular from the HPSI components mortgage rate direction and good time to buy a house. In addition, the starter home tight supply and rising home prices, as well as the unsettled political environment, are likely giving many consumers a reason to pause or question their home purchase sentiment.”
Here are the survey highlights:
• Fannie Mae’s September 2016 HPSI decreased 2.2 percent in September to 82.8. Overall, the HPSI is down 1.0 point since the same time last year.
• Breaking from the increasing trend of the past few months, the net share of Americans who say it is a good time to buy a house fell by 5 percent to 29 percent to match a previous all-time low reached in May.
• The net percentage of those who say it is a good time to sell a house remained at 15 percent in September.
• The net share of Americans who say that home prices will increase fell 1 percent from August to 34 percent.
• The net share of those who say mortgage rates will decrease during the next 12 months fell 6 percent to negative 44 percent.
• The net share of Americans who say they are not concerned with losing their job fell 3 percent to 70 percent.
• The net share of Americans who say their household income is significantly higher than it was 12 months ago rose 2 percent to 12 percent.