The Fannie Mae Home Purchase Sentiment Index (HPSI) decreased 3.4 points to 64.8 in June, the second-lowest reading in a decade. The HPSI is down 14.9 points compared with June 2021, according to Fannie Mae.
One in five surveyed consumers reported believing it is a good time to buy a home, while the percentage of consumers who believe it is a good time to sell a home fell 8 percentage points to 68% in June. Four of the HPSI’s six components decreased on a month-over-month basis in June, including the components associated with perceived job stability and household income.
“In June, a survey-record 81% of consumers reported that the economy is on the wrong track, suggesting to us—and corroborated by other recently released consumer confidence measures—that people appear to be growing increasingly frustrated with inflation and the slowing economy,” says Doug Duncan, Fannie Mae senior vice president and chief economist. “Moreover, 21% of respondents expressed job stability concerns, the highest percentage in 18 months. This month’s HPSI reading reflects these macroeconomic and personal financial concerns, with housing sentiment additionally diminished by the recent rapid increases in mortgage rates.”
The net share of respondents who believe it is a good time to buy increased 7 percentage points month over month in June while the net share of respondents reporting it is a good time to sell a home decreased 15 percentage points last month, according to Fannie Mae.
“Interestingly, consumers’ perceptions of home selling conditions declined meaningfully in June, returning to pre-pandemic levels,” Duncan says. “This was particularly true for homeowner respondents. At the same time, consumers, especially those in prime home buying groups, appear to be feeling the affordability pinch of higher mortgage rates: Approximately half of all respondents indicated that it would be ‘difficult’ to get a mortgage, the highest such percentage since 2014.”
According to the HPSI, the net share of respondents who believe home prices will go up decreased 7 percentage points month over month in June. The percentage of respondents who are concerned about losing their job in the next 12 months increased 5 percentage points to 21% in June, while the net share of respondents who reported their household income was significantly higher than it was 12 months ago decreased 1 percentage point in June.
The HPSI distills information about consumers’ home purchase sentiment from Fannie Mae’s National Housing Survey into a single number, reflecting current views and forward-looking expectations of housing market conditions. The index is constructed from answers to six National Housing Survey questions that solicit consumers’ evaluations of housing market conditions and address topics that are related to their home purchase decisions.
