Fannie Mae: Consumer Confidence in Housing Hits Record High

The Fannie Mae Home Purchase Sentiment Index increased by 5.6 percentage points in February to 88.3, a record high.

Five of the six components comprising the HPSI increased, with three hitting record highs. The net share of Americans who reported that now is a good time to buy rose by 11 percentage points to 40 percent, while the net share who believe that now is a good time to sell rose by 7 percentage points to 22 percent. Consumers also demonstrated greater confidence about not losing their jobs, with the net share rising by 9 percentage points to 45 percent.

Fannie Mae said on net, the share of respondents reporting that their household income is significantly higher than it was 12 months ago increased by 4 percentage points. Additionally, more Americans expect home prices to go up, with the net share rising by 3 percentage points. The net share of those who think mortgage rates will go down over the next 12 months remained unchanged for the third consecutive month.

“Millennials showed especially strong increases in job confidence and income gains, a necessary precursor for increased housing demand from first-time homebuyers,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Millennials are accelerating the rate at which they move out of their parents’ homes and form new households. However, continued slow supply growth implies continued strong price appreciation and affordability constraints facing millennials and first-time buyers in many markets.”