WASHINGTON, July 7, 2021 /PRNewswire/ -- The Fannie Mae (OTCQB: FNMA) Home Purchase Sentiment Index® (HPSI) was largely unchanged in June, decreasing by 0.3 points to 79.7, despite even greater volatility among its underlying components. The "Good Time to Buy" and "Good Time to Sell" components once again produced the most notable results. On the buy-side, 64 percent of respondents said it's a bad time to buy a home, up from 56 percent last month; while on the sell-side, 77 percent of respondents said it's a good time to sell, up from 67 percent last month. The components more closely associated with household finances were largely flat month over month but remain elevated compared to this time last year, particularly the component regarding job security. Year over year, the overall index is up 3.2 points.
"The HPSI remained flat this month, although its underlying buy and sell components continued to diverge, setting record positive and negative readings, respectively," said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. "Consumers also continued to cite high home prices as the predominant reason for their ongoing and significant divergence in sentiment toward homebuying and home-selling conditions. While all surveyed segments have expressed greater negativity toward homebuying over the last few months, renters who say they are planning to buy a home in the next few years have demonstrated an even steeper decline in homebuying sentiment than homeowners. It's likely that affordability concerns are more greatly affecting those who aspire to be first-time homeowners than other consumer segments who have already established homeownership."
Duncan continued: "Despite the pessimism in homebuying conditions, we expect demand for housing to persist at an elevated level through the rest of the year. Mortgage rates remain not too far from their historical lows, and consumers are expressing even greater confidence about their household income and job situation compared to this time last year, when the pandemic had shut down wide swaths of the economy."
Home Purchase Sentiment Index – Component Highlights
Fannie Mae's Home Purchase Sentiment Index (HPSI) decreased in June by 0.3 points to 79.7. The HPSI is up 3.2 points compared to the same time last year. Read the full research report for additional information.
- Good/Bad Time to Buy: The percentage of respondents who say it is a good time to buy a home decreased from 35% to 32%, while the percentage who say it is a bad time to buy increased from 56% to 64%. As a result, the net share of those who say it is a good time to buy decreased 11 percentage points month over month.
- Good/Bad Time to Sell: The percentage of respondents who say it is a good time to sell a home increased from 67% to 77%, while the percentage who say it's a bad time to sell decreased from 25% to 15%. As a result, the net share of those who say it is a good time to sell increased 20 percentage points month over month.
- Home Price Expectations: The percentage of respondents who say home prices will go up in the next 12 months increased from 47% to 48%, while the percentage who say home prices will go down increased from 17% to 21%. The share who think home prices will stay the same decreased from 29% to 25%. As a result, the net share of Americans who say home prices will go up decreased 3 percentage points month over month.
- Mortgage Rate Expectations: The percentage of respondents who say mortgage rates will go down in the next 12 months remained unchanged at 6%, while the percentage who expect mortgage rates to go up increased from 49% to 57%. The share who think mortgage rates will stay the same decreased from 38% to 30%. As a result, the net share of Americans who say mortgage rates will go down over the next 12 months decreased 8 percentage points month over month.
- Job Concerns: The percentage of respondents who say they are not concerned about losing their job in the next 12 months increased from 87% to 88%, while the percentage who say they are concerned decreased from 12% to 11%. As a result, the net share of Americans who say they are not concerned about losing their job increased 2 percentage points month over month.
- Household Income: The percentage of respondents who say their household income is significantly higher than it was 12 months ago decreased from 29% to 27%, while the percentage who say their household income is significantly lower remained unchanged at 13%. The percentage who say their household income is about the same increased from 54% to 56%. As a result, the net share of those who say their household income is significantly higher than it was 12 months ago decreased 2 percentage points month over month.
About Fannie Mae's Home Purchase Sentiment Index
The Home Purchase Sentiment Index (HPSI) distills information about consumers' home purchase sentiment from Fannie Mae's National Housing Survey® (NHS) into a single number. The HPSI reflects consumers' current views and forward-looking expectations of housing market conditions and complements existing data sources to inform housing-related analysis and decision making. The HPSI is constructed from answers to six NHS questions that solicit consumers' evaluations of housing market conditions and address topics that are related to their home purchase decisions. The questions ask consumers whether they think that it is a good or bad time to buy or to sell a house, what direction they expect home prices and mortgage interest rates to move, how concerned they are about losing their jobs, and whether their incomes are higher than they were a year earlier.
About Fannie Mae's National Housing Survey
The most detailed consumer attitudinal survey of its kind, Fannie Mae's National Housing Survey (NHS) polled approximately 1,000 respondents via live telephone interview to assess their attitudes toward owning and renting a home, home and rental price changes, homeownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts, six of which are used to construct the HPSI (findings are compared with the same survey conducted monthly beginning June 2010). For more information, please see the Technical Notes. Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to support the housing market. The June 2021 National Housing Survey was conducted between June 1, 2021 and June 24, 2021. Most of the data collection occurred during the first two weeks of this period. Interviews were conducted by PSB, in coordination with Fannie Mae.
Detailed HPSI & NHS Findings
For detailed findings from the June 2021 Home Purchase Sentiment Index and National Housing Survey, as well as a brief HPSI overview and detailed white paper, technical notes on the NHS methodology, and questions asked of respondents associated with each monthly indicator, please visit the Surveys page on fanniemae.com. Also available on the site are in-depth special topic studies, which provide a detailed assessment of combined data results from three monthly studies of NHS results.
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About Fannie Mae
Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of people in America. We partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing finance to make the home buying process easier, while reducing costs and risk. To learn more, visit:
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Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's Economic & Strategic Research (ESR) Group included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR Group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.
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