The percentage of Americans who felt positive about the housing market reached an all-time high in January, according to Fannie Mae’s latest Home Purchase Sentiment Index (HPSI).
The index rose 3.7 points in January to 89.5, with increases in five of the six components measured by Fannie Mae.
“HPSI rebounded from last month’s dip to a new survey high in January, in large part due to the spike in consumers’ net expectations that home prices will increase over the next year,” Fannie Mae Senior Vice President and Chief Economist Doug Duncan said in a release. “Results may continue to fluctuate over the coming months as consumers sort out the implications of the newly passed tax legislation on their household finances.”
“Over the past year, continued home price growth has helped spur a sizable increase in the net share of consumers who say it’s a good time to sell a home but also a modest weakening in the net share who say it is a good time to buy,” Duncan added. “At the start of 2018, it is still too early to determine the overall effect of the new tax legislation on housing, and we will need to see whether positive impacts on both housing demand and supply materialize in the coming months.”
The net share of respondents who in January said now is a good time to buy a home increased 3 percentage points compared to December. Additionally, the net share who reported that now is a good time to sell a home increased 4 percentage points and is now up 23 percentage points year-over-year, the index showed.
Respondents who believed home prices would go up in the next 12 months increased 8 percentage points in January; and respondents who said they are not concerned about losing their job increased 5 percentage points.
According to the index, the net share of consumers who said mortgage rates will go down over the next 12 months increased 2 percentage points in January, while the net share reporting that their income is significantly higher than it was 12 months ago remained flat.