Fannie Mae: Home Purchase Sentiment Ends 2017 on Cautious Note
Fannie Mae, Washington, D.C., said its Home Purchase Sentiment Index fell in December as consumers appeared less optimistic about the housing market.
The HPSI decreased 2.0 points in December to 85.8, reversing November’s increase. The Fannie Mae attributed the decline to decreases in four of the six HPSI components. The net share of respondents who said now is a good time to buy a home decreased by 5 percentage points compared to November and is down by 8 percentage points compared to the same period last year. Meanwhile, the net share who reported that now is a good time to sell a home remained flat and is up by 21 percentage points year-over-year.
The net share who said home prices will go up in the next 12 months decreased by 2 percentage points in December, while Americans also expressed a weakened sense of job security, with the net share who say they are not concerned about losing their job decreasing 6 percentage points. Finally, the net share of consumers who said mortgage rates will go down over the next 12 months fell by 1 percentage point in December, while the net share reporting that their income is significantly higher than it was 12 months ago rose by 2 percentage points.
“Consumers remained cautious in their housing outlook at the end of 2017, as tax reform discussions continued,” said Fannie Mae Chief Economist Doug Duncan. “Entering 2018, housing affordability remains a persistent challenge, particularly in rental markets, where consumer expectations for price increases over the next 12 months reached a new survey high.”
Report highlights:
–The HPSI rose by 5.1 points from a year ago.
–The net share of Americans who say it is a good time to buy a home fell to 24%, erasing much of last month’s rise.
–The net percentage of those who say it is a good time to sell remained unchanged at 34%.
–The net share of Americans who say home prices will go up fell 2 percentage points to 44% in December.
–The net share of those who say mortgage rates will go down over the next 12 months fell 1 percentage point to -52%.
–The net share of Americans who say they are not concerned about losing their job fell by 6 percentage points to 68%.
–The net share of Americans who say their household income is significantly higher than it was 12 months ago rose 2 percentage points to 16%.
