Fannie Mae’s Home Purchase Sentiment Index (HPSI), which measures American attitudes about home purchases and sales, improved slightly in January, ending a five-month decline.
The HPSI ended January at 82.7 percent, an increase of 2 percent versus December 2016. Four of the six gauges measured by the HPSI improved in January. Still, many Americans continue to express concern about their job security and mortgage rates.
“Three months after the presidential election, measures of consumer optimism regarding personal financial prospects and the economy are at or near the highest levels we’ve seen in the nearly seven-year history of the National Housing Survey,” Fannie Mae Senior Vice President and Chief Economist Doug Duncan stated in a release. “However, any significant acceleration in housing activity will depend on whether consumers’ favorable expectations are realized in the form of income gains sufficient to offset constrained housing affordability. If consumers’ anticipation of further increases in home prices and mortgage rates materialize over the next 12 months, then we may see housing affordability tighten even more.”
The HPSI polls 1,000 Americans via telephone to gauge attitudes about owning and renting a home, home and rental price changes, homeownership distress, the economy, household finances, and overall consumer confidence. Respondents are asked more than 100 questions and six of those questions are used to create the HPSI.
Specifically, this most recent HPSI revealed:
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Twenty-nine percent of Americans believe it’s a good time to purchase a home. That figure declined by 3 percent from December and was equal to the survey low point in May 2016 and September 2016.
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The percentage of respondents who think it’s a good time to sell a home rose 2 percent to 15 percent.
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Forty-two percent of Americans believe home prices will increase. That represents a 7 percent jump.
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The percentage of Americans who predict mortgage rates will decline in the next year (-55 percent) remained the same.
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Americans who say they are not concerned about losing their job rose by 1 percent to 69 percent.
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Americans who say their household income is higher than it was one year ago jumped 5 percent to 15 percent.