Housing Confidence Gaining Steam After Nearing Survey Low
WASHINGTON, July 7, 2020 /PRNewswire/ -- The Fannie Mae (OTCQB: FNMA) Home Purchase Sentiment Index® (HPSI) increased 9.0 points in June to 76.5, building further on the prior month’s advance after approaching a survey low in April. Four of the six HPSI components increased month over month, with consumers reporting a significantly more positive view of homebuying and home-selling conditions, as well as greater optimism regarding home price appreciation. Year over year, the HPSI is down 15.0 points.
“A second month of improvement in June allowed the HPSI to regain some of the sharp losses in optimism observed in March and April,” said Doug Duncan, Senior Vice President and Chief Economist. “The share of renters who say it’s a good time to buy a home is now at its highest level in five years, suggesting favorable conditions for first-time homebuying, consistent with the recent rebound in home purchase activity. Homeowners seem to have taken note of the resulting lack of housing supply, with an increased share saying it’s a good time to sell a home. However, this activity may cool again in the coming months, depending on the extent to which it can be attributed to consumers having chosen to delay or to accelerate homebuying plans due to the pandemic. Survey respondents’ persistent, substantially elevated concerns about job security in the face of record unemployment remains a key takeaway, particularly among renters and homeowners with a mortgage. We believe the continuing uncertainty regarding the coronavirus’ containment suggests an uneven and potentially volatile course toward economic recovery.”
Home Purchase Sentiment Index – Component Highlights
Fannie Mae’s Home Purchase Sentiment Index (HPSI) increased in June by 9.0 points to 76.5. The HPSI is down 15.0 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 52% to 61%, while the percentage who say it is a bad time to buy decreased from 39% to 27%. As a result, the net share of Americans who say it is a good time to buy increased 21 percentage points.
- Good/Bad Time to Sell: The percentage of respondents who say it is a good time to sell a home increased from 32% to 41%, while the percentage who say it’s a bad time to sell decreased from 62% to 48%. As a result, the net share of those who say it is a good time to sell increased 23 percentage points.
- Home Price Expectations: The percentage of respondents who say home prices will go up in the next 12 months increased this month from 26% to 34%, while the percentage who said home prices will go down decreased from 35% to 25%. The share who think home prices will stay the same increased from 30% to 31%. As a result, the net share of Americans who say home prices will go up increased 18 percentage points.
- Mortgage Rate Expectations: The percentage of respondents who say mortgage rates will go down in the next 12 months decreased this month from 25% to 17%, while the percentage who expect mortgage rates to go up increased from 25% to 32%. The share who think mortgage rates will stay the same decreased from 43% to 42%. As a result, the net share of Americans who say mortgage rates will go down over the next 12 months decreased 15 percentage points.
- Job Concerns: The percentage of respondents who say they are not concerned about losing their job in the next 12 months decreased from 75% to 74%, while the percentage who say they are concerned increased from 24% to 26%. As a result, the net share of Americans who say they are not concerned about losing their job decreased 3 percentage points.
- Household Income: The percentage of respondents who say their household income is significantly higher than it was 12 months ago increased from 18% to 25%, while the percentage who say their household income is significantly lower decreased from 19% to 16%. The percentage who say their household income is about the same decreased from 61% to 58%. As a result, the net share of those who say their household income is significantly higher than it was 12 months ago increased 10 percentage points.
About Fannie Mae’s Home Purchase Sentiment Index
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.
About Fannie Mae’s National Housing Survey
The most detailed consumer attitudinal survey of its kind, Fannie Mae’s National Housing Survey (NHS) polled approximately 1,000 respondents via live telephone interview to assess their attitudes toward owning and renting a home, home and rental price changes, homeownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts, six of which are used to construct the HPSI (findings are compared with the same survey conducted monthly beginning June 2010). As cell phones have become common and many households no longer have landline phones, the NHS contacts 70 percent of respondents via their cell phones (as of January 2018). For more information, please see the Technical Notes. Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to support the housing market. The June 2020 National Housing Survey was conducted between June 1, 2020 and June 21, 2020. Most of the data collection occurred during the first two weeks of this period. Interviews were conducted by PSB, in coordination with Fannie Mae.
Detailed HPSI & NHS Findings
For detailed findings from the June 2020 Home Purchase Sentiment Index and National Housing Survey, as well as a brief HPSI overview and detailed white paper, technical notes on the NHS methodology, and questions asked of respondents associated with each monthly indicator, please visit the Surveys page on fanniemae.com. Also available on the site are in-depth special topic studies, which provide a detailed assessment of combined data results from three monthly studies of NHS results.
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About Fannie Mae
Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of Americans. We partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing finance to make the home buying process easier, while reducing costs and risk. To learn more, visit:
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Opinions, analyses, estimates, forecasts, and other views of Fannie Mae’s Economic & Strategic Research (ESR) Group included in these materials should not be construed as indicating Fannie Mae’s business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR Group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.
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