Fannie Mae’s Home Purchase Sentiment Index (HPSI) dipped in December, as four of the six components measuring consumer confidence concerning purchasing homes declined.
The HPSI decreased 2 percentage points in December to 85.8. According to Fannie Mae, the net share of respondents who said now is a good time to buy a home decreased 5 percentage points compared to November and is down 8 percentage points compared to the same period last year.
Additionally, the net share of respondents who said now is a good time to sell a home remained flat in December and is up 21 percentage points year-over-year.
“Consumers remained cautious in their housing outlook at the end of 2017, as tax reform discussions continued. In December, mirroring the other major consumer sentiment benchmarks, the HPSI reflected this caution and declined slightly,” Fannie Mae Senior Vice President and Chief Economist Doug Duncan said in a release. “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.”
The HPSI also found that the net share of respondents who said home prices will go up in the next 12 months decreased 2 percentage points; the net share who said they are not concerned about losing their job declined 6 percentage points; and the net share of consumers who said mortgage rates will go down over the next 12 months dropped 1 percentage point in December. The net share reporting that their income is significantly higher than it was 12 months ago increased 2 percentage points.