Fannie Mae’s Home Purchase Sentiment Index (HPSI) increased in January to 77.7, a 3.7-point improvement from December.
Fannie Mae said consumers reported a significantly more positive view of home-selling conditions month-over-month. Year-over-year, the HPSI declined15.3 points.
“The HPSI experienced a modest uptick in January, reversing much of December’s decline,” Fannie Mae Senior Vice President and Chief Economist Doug Duncan said in a release. “Interestingly, lower-income and renter groups were more optimistic this past month across nearly all of the sentiment index’s components.”
“We will pay close attention to see if this newfound optimism develops into a trend, which could indicate either that some demographics who have been more negatively impacted by the pandemic may be starting to feel the economic recovery or that this is a response to the additional stimulus enacted in December,” Duncan said.
According to the HPSI, the percentage of respondents who in December said it was a good time to buy a home remained unchanged at 52 percent, while the percentage who said it was a bad time to buy decreased from 39 percent to 37 percent.
During December, the percentage of respondents who said it was a good time to sell a home increased from 50 percent to 57 percent, while the percentage who said it was bad time to sell decreased from 42 percent to 33 percent.
The percentage of respondents who in December said home prices will go up in the next 12 months remained the same at 41 percent, while the percentage who said home prices will go down increased from 16 percent to 17 percent.
Additionally, the percentage of respondents who in December said they were not concerned about losing their job in the next 12 months remained unchanged at 75 percent, while the percentage who said they were concerned decreased from 25 percent to 24 percent.
Fannie Mae said the percentage of respondents who in December said their household income was significantly higher than it was 12 months ago increased from 20 percent to 21 percent, while the percentage who said their household income was significantly lower decreased from 18 percent to 14 percent. The percentage who said their household income was about the same increased from 61 percent to 64 percent.
“Overall, the index’s monthly increase was driven largely by a substantial jump in the share of consumers reporting that it’s a good time to sell a home, with many citing favorable mortgage rates, high home prices, and low housing inventory as their primary rationale,” Duncan said. “Among owners and higher income groups, however, the other five components of the index remained relatively flat or slightly negative, suggesting to us that some consumers are waiting to gauge the effectiveness of any new fiscal policies and vaccination distribution programs on both housing and the larger economy.”