Fannie Mae HPSI Up Slightly in August

(Image courtesy of Fannie Mae; Breakout image courtesy of Andrea Piacquadio/pexels.com)

Fannie Mae released the results of its Home Purchase Sentiment Index for August, finding it increased 0.6 points to 72.1.

The full index is up 5.2 points year-over-year.

The bump was in part driven by consumers’ increased optimism about future mortgage rates, but there was little change in overall homebuying sentiment.

“Despite significantly greater optimism that mortgage rates and home prices will move in a more favorable direction for potential homebuyers, most consumers remain apprehensive about the housing market and continue to point to the lack of affordability and supply as the chief reasons for their pessimism,” said Mark Palim, Fannie Mae Vice President and Deputy Chief Economist.

A survey-high of 39% of consumers said they expect mortgage rates to decline in the next 12 months, up from 29% in July. Additionally, 35% expect mortgage rates to stay the same, and 26% expect rates to increase.

Only 37% say home prices will go up over the next year, a lower share than in July (41%) with 25% saying they will go down.

Only 17% of consumers say it’s a good time to buy, with 83% saying it’s a bad time. But, 65% say it’s a good time to sell.

In terms of general economic outlook, 78% of respondents were not concerned about job loss, and 17% said they believe their household income will be significantly higher over the next year.

“On a national level, housing sentiment was largely unchanged in August despite some positive developments for affordability, including a meaningful decline in actual mortgage rates and an uptick in home listings in certain markets, particularly in the Sunbelt,” Palim continued. “However, our survey did capture some interesting regional variation likely related to supply: In August, 56% of survey respondents from the South indicated that it’s a ‘good time to sell,’ a decrease of 5 percentage points month over month. This represented a strong divergence from the Northeast (80%), Midwest (70%), and West (66%) regions’ sense of home-selling conditions, each of which moved higher this month.”