The Fannie Mae Home Purchase Sentiment Index® (HPSI) rose 0.6 points in May to 92.3, reaching a new all-time survey high for the second consecutive month and staying 6.1 percentage points versus this time last year.
While the net share of respondents who reported that now is a good time to sell a home increased to 46% in May, and is now up 14% points year over year, the net share who said now is a good time to buy a home decreased to 28%, showing little improvement year over year. Meanwhile, the net share of consumers who said home prices will go up in the next 12 months remained unchanged at 49%, while the net share who expect mortgage rates to go down over the next 12 months fell 1 percentage point.
More Americans reported improved job confidence in May and an increase in household income over the past 12 months. However, our National Housing Survey® results also showed that the share of consumers who expect their personal financial situation to improve within the next year fell 6 percentage points to 48%, and those who expect it to stay the same rose 6 percentage points to 40%.
“The HPSI edged up to another survey high in May, bolstered in part by a fresh record high in the net share of consumers who say it’s a good time to sell a home. However, the perception of high home prices that underlies this optimism cuts both ways, boosting not only the good-time-to-sell sentiment but also the view that it’s a bad time to buy, and presenting a potential dilemma for repeat buyers,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “For the survey’s renter respondents, who are unable to reap benefits from selling a home, the HPSI has been essentially flat in the first quarter, during which home sales were also lackluster. According to our latest Mortgage Lender Sentiment Survey®, which we expect to release on Tuesday, lenders expect mortgage demand to soften in the near term.”
