Five of the six components of Fannie Mae’s Home Purchase Sentiment Index (HPSI) decreased month-over-month during March, including the percentage of Americans expressing concern about losing their job within the next 12 months.
The latest HPSI fell 11.7 points to 80.8 in March, its lowest reading since December 2016, with consumers reporting that homebuying and home-selling conditions have worsened and taking a more pessimistic view of home price growth. Year-over-year, the HPSI declined 9 points in March.
“In March, the HPSI dropped to its lowest level since December 2016, with Americans reporting greater concern about their job security than at any point in the last six years,” Fannie Mae Senior Vice President and Chief Economist Doug Duncan said in a statement.
“Attitudes about the current home-selling environment deteriorated markedly, falling to their lowest level since January 2017,” Duncan said. “A survey record one-month drop in optimism about the direction of the economy appears to have weakened consumers’ views of both the current home-selling and homebuying environment, though the latter is likely buffered in part by low mortgage rates.”
During March, the percentage of Americans who said it was a good time to buy a home decreased from 59 percent to 56 percent, while the percentage who said it was a bad time to buy increased from 32 percent to 36 percent. Overall, the net share of Americans who said it was a good time to buy decreased 7 percent.
The percentage of Americans who in March said it was a good time to sell decreased from 67 percent to 52 percent. The percentage who said it was a bad time to sell increased from 22 percent to 36 percent. As a result, the net share of those who in March said it was a good time to sell decreased 29 percent.
“When asked why it’s a bad time to buy or sell a home, approximately 7 percent of consumers offered COVID-19 as an unprompted response, one of the highest percentages of non-standard answers in the survey’s history,” Duncan said. “We expect these developments to weigh heavily on housing activity during the spring/summer home buying season.”
The percentage of Americans who in March said home prices will go up in the next 12 months decreased from 47 percent to 39 percent, while the percentage who said home prices will go down increased from 8 percent to 22 percent.
The percentage of Americans who in March said they were not concerned about losing their job in the next 12 months decreased from 85 percent to 77 percent. The percentage who said they are concerned increased from 13 percent to 23 percent.