The Fannie Mae Home Purchase Sentiment Index® (HPSI) fell in July for the second consecutive month, dropping 4.2 points to 86.5, after reaching survey highs in April and May.
The decline can be attributed to decreases in four of the six HPSI components. The net share of survey respondents who said now is a good time to buy a home fell 4 percentage points, and the net share who said it is a good time to sell a home fell 6 percentage points. Additionally, the net share who said that home prices will go up in the next 12 months decreased 7 percentage points. More Americans also expressed a decreased sense of job security, with the net share who said they are not concerned about losing their job falling 11 percentage points in July.
“Home purchase sentiment seems to have reached a plateau, with potential home sellers likely struggling to find a home to buy amid slow supply growth, expectations for rising mortgage rates, and significant home price increases,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Survey respondents cite ‘high home prices’ as the top reason why it is both a good time to sell a home and bad time to buy a home. This suggests a contributing factor to the low supply of existing homes for sale is that current owners are reluctant to trade up in a rising price market. Additionally, the shares of consumers citing favorable mortgage rates as a reason why it’s a good time to buy or sell a home both dropped to fresh survey lows.”
Among other findings:
- The net share of Americans who say mortgage rates will go down over the next 12 months rose 1 percentage point to -52%.
- The net share of those who say their household income is significantly higher than it was 12 months ago rose 2 percentage points to 21%, matching the survey high from May 2018.
