The Fannie Mae Home Purchase Sentiment Index (HPSI) rebounded in June after dipping to an all-time survey low in the previous month. The index increased 3.2 points to a reading of 72.6; the full index is up 6.6 points year over year.
In June, 19% of consumers indicated it is a good time to buy a home, up from a survey-low 14% in May. Additionally, the share of consumers believing it is a good time to sell a home increased to 66% from 64%.
“Affordability concerns remain the primary driver of consumer housing sentiment, even as topline findings from our monthly survey showed a modest uptick in optimism on both home buying and home selling conditions,” says Mark Palim, Fannie Mae vice president and deputy chief economist. “If mortgage rates decline through the end of the year, as we currently forecast, we do think home sales activity will pick up, but progress on that front is likely to be slow due to the ongoing imbalance between supply and demand.”
According to Fannie Mae, a greater share of consumers in June expressed belief that home prices and mortgage rates would rise over the next 12 months. Forty-five percent of consumers believe home prices will go up while 33% of consumers believe mortgage rates will increase. Conversely, 17% of consumers believe home prices will decline in the next 12 months and 24% of respondents believe mortgage rates will decrease.
“A significant majority of consumers continue to tell us that it’s a ‘bad time’ to buy a home, and they’re also telling us that they expect both home prices and mortgage rates to move higher over the next 12 months,” Palim says. “Taken together, in our view, this leaves little upside to overall sentiment until meaningful progress is made on affordability—most likely in the form of either lower rates or improved supply.”
The percentage of consumers who are not concerned about losing their job in the next 12 months increased to 79% from 75% while the percentage of respondents who say their household income is significantly higher than it was 12 months ago decreased to 16% from 20%.
