The Fannie Mae Home Purchase Sentiment Index® (HPSI) for November fell for the fourth consecutive month, dropping a half point to 81.2, Fannie reported Wednesday. The index, however, remains a half point ahead of where it was at the same time last year.
Four of the six components that comprise the HPSI fell in November amid mixed consumer attitudes on either side of the U.S. presidential election. The share of consumers expecting mortgage rates to go down over the next year and those who believe now is a good time to sell a home both fell six percentage points on net. In addition, the net share of consumers reporting confidence in not losing their job over the next 12 months fell five percentage points. However, the net share who reported significantly higher household income compared with the same period last year climbed 11 percentage points in November, more than reversing the drop seen in October.
Specifically, the survey from which the index is derived reported:
- The net share of Americans who say it is a good time to buy a house fell by 1 percentage point to 30%.
- The net percentage of those who say it is a good time to sell fell 6 percentage points to 13% in November. The share who think it is a bad time to sell rose 2 percentage points from last month’s survey low to 38%.
- The net share of Americans who say that home prices will go up increased 4 percentage points in November to 35%, reversing the 3-month downward trend for this metric.
- The net share of those who say mortgage rates will go down over the next twelve months fell 6 percentage points to -51%.
- The net share of Americans who say they are not concerned with losing their job fell 5 percentage points to 64%.
- The net share of Americans who say their household income is significantly higher than it was 12 months ago rose 11 percentage points to 15% in November, reversing the drop seen in October.
“The November Home Purchase Sentiment Index outcome is difficult to interpret as the data collection period occurred across the Presidential election timeline,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The results are fairly evenly split between responses collected before and after the election, and there is evidence of an increase in consumer optimism in the immediate aftermath of the election. However, we caution readers against drawing conclusions about sustainable changes in consumer sentiment so soon after the election.”
He continued, “We do not see in the November HPSI results a fundamental departure from a flattening of housing activity relative to prior periods. This is consistent with our corporate forecast of a modest growth in the 12 months ahead.”
