Fannie Mae’s Home Purchase Sentiment Index (HPSI) increased 2.7 points in November, approaching the survey high set in August.
Fannie Mae said three of the six HPSI components measured increased month-over-month, including large increases in the percentage of Americans who believe it’s a good time to buy and that home prices will go up over the next 12 months.
“Over the past year, a growing share of consumers say that they expect mortgage rates to remain steady,” Fannie Mae Senior Vice President and Chief Economist Doug Duncan said in a release. “While low rates have helped boost housing affordability compared to last year, the HPSI has increased only moderately in that timeframe.”
“This may be due in part to the ongoing challenge of tight housing supply, especially in the starter home market. That lean supply means the recent mortgage rate decline – holding payment size constant – allows borrowers to increase bid prices for homes,” Duncan said. “As a result, home prices are propelled higher, mitigating the benefit of lower borrowing costs for many borrowers. Additionally, a rising savings rate suggests that consumers could be growing more financially conservative. Looking ahead, we continue to expect a steady but modest pace of growth in home purchase activity.”
During November, the percentage of Americans who said it is a good time to buy increased from 57 percent to 61 percent, while the percentage who said it is a bad time to buy decreased from 36 percent to 29 percent.
Fannie Mae said the percentage of Americans who said it was a good time to sell in November decreased from 67 percent to 66 percent, while the percentage who said it was a bad time to sell remained flat at 26 percent.
Additionally, the percentage of Americans who in November said home prices will go up in the next 12 months increased from 41 percent to 44 percent, while the percentage who said home prices will go down decreased from 14 percent to 10 percent.
The percentage of Americans who said their household income was significantly higher in November than it was 12 months ago remained the same at 28 percent, while the percentage who said their household income was significantly lower decreased from 12 percent to 10 percent.