Fannie Mae’s Home Purchase Sentiment Index (HPSI) increased 3.7 points in May to 92, just below the survey high set one year earlier.
The increase in May’s HPSI largely was attributable to a13-percentage point increase in the consumers who said now is a good time to buy. The net share of respondents expecting home prices to go up increased by 5 percentage points, and respondents who said mortgage rates will go down over the next 12 months increased by 3 percentage points.
“Another sharp rebound in the ‘good time to buy’ component lifted the HPSI nearer its survey high set during last year’s homebuying season, though several uncertainties remain,” Fannie Mae Chief Economist Doug Duncan said in a release. “While consumers’ more favorable mortgage rate outlook suggests continued support for housing affordability, potential homebuyers still face supply constraints.
“Additionally, while the survey recently resumed its upward trend, consumers’ sense of income growth and job security have moved lower from the highs established earlier in the year, which, if sustained, could weigh on the housing market in the second half of the year,” Duncan said.
During May, the net share of respondents who said it is a good time to sell a home remained unchanged at 43 percent; the net share of Americans who said they are not concerned about losing their job over the next 12 months increased 2 percentage points to 76 percent; and net share of those who said their household income is significantly higher than it was 12 months ago decreased 1 percent point to 21 percent.