Fannie Mae’s Home Purchase Sentiment Index (HPSI) in July declined for the second consecutive month, the company announced.
The HPSI in July dropped 4.2 points to 86.5, after reaching survey highs in April and May. Four of the six components measured by the index fell.
“Home purchase sentiment seems to have reached a plateau, with potential home sellers likely struggling to find a home to buy amid slow supply growth, expectations for rising mortgage rates, and significant home price increases,” Fannie Mae Chief Economist Doug Duncan said in a release. “Survey respondents cite ‘high home prices’ as the top reason why it is both a good time to sell a home and bad time to buy a home.
“This suggests a contributing factor to the low supply of existing homes for sale is that current owners are reluctant to trade up in a rising price market,” Duncan added. “Additionally, the shares of consumers citing favorable mortgage rates as a reason why it’s a good time to buy or sell a home both dropped to fresh survey lows.”
According to the HPSI, the net share of survey respondents who said now is a good time to buy a home fell 4 percentage points; and the net share who said it is a good time to sell a home fell 6 percentage points.
The net share of survey respondents who said that home prices will go up in the next 12 months decreased 7 percentage points. Additionally, more Americans expressed concerns about job security, with the net share who said they are not concerned about losing their job falling 11 percentage points in July.