Consumer home purchasing sentiment decreased 2.7 points in October to 88.9, according to Fannie Mae’s latest Home Purchase Sentiment Index (HPSI).
Fannie Mae said the decline was precipitated by a drop in five of the six HPSI components measured, including the percentage of survey respondents who said it is a good time to buy and the percentage who said their household income is significantly higher.
“Consumer home purchase sentiment remains robust, with the HPSI still near its survey high despite dipping for a second consecutive month,” Fannie Mae Senior Vice President and Chief Economist Doug Duncan said in a release. “The ‘good time to buy’ component has declined notably, despite low mortgage rates, due in part to the persistent challenge of a lack of affordable housing supply.
“In turn, the net share of consumers expecting home prices to increase over the next 12 months has fallen to its lowest reading in seven years,” Duncan added. “Still, low mortgage rates and a strong labor market are supporting the index’s overall strength, which is consistent with our expectation for a modest expansion in home purchase activity in the fourth quarter.”
According to the HPSI, the net share of Americans who said it is a good time to buy decreased 7 percentage points to 21 percent. The net share of those who said it is a good time to sell fell 3 percentage points to 41 percent.
Additionally, the net share of Americans who said home prices will go up fell 2 percentage points to 27 percent; and the net share of Americans who said mortgage rates will go down over the next 12 months fell 2 percentage points to minus-25 percent.