WASHINGTON–Even though many people feel locked out of the home buying market—especially first-time buyers–consumers continue to feel more optimistic about their prospects of buying a home.
In Fannie Mae’s newest Home Purchase Sentiment Index (HPSI), a composite index designed to track consumers’ housing-related attitudes, intentions, and perceptions based on six questions from the National Housing Survey (NHS), four of the six components increased.
The four categories include: Job Loss Concern, Home Price Outlook, Mortgage Rate Outlook, and Change in Household Income. Buying Conditions was the only HPSI component that declined this month. Selling conditions were unchanged month over month
What the HPSI Found
Here is what consumers had to say by category:
Good Time to Buy
The net share of consumers (-53%) who say it is a good time to buy a home decreased 10 percentage points since last month. The share who say it is a good time to buy decreased five percentage points (23%), while the share who say it is a bad time to buy (77%) increased six percentage points.
Home Prices Will Go Up
The net share of consumers who say home prices will go up (28%) increased five percentage points since last month. The share of consumers who expect home prices to go up increased one percentage point to 46%, while the share who expect prices to go down decreased four percentage points to 18%.
Mortgage Rates Will Go Up
The net share of consumers who say mortgage rates will go down in the next 12 months increased five percentage points to -4% in July.
The net share of employed consumers who say they are not concerned about losing their job increased 9 percentage points to 50%.
Household Income
The net share who say their household income is significantly higher than a year ago increased two percentage points to 8%. Majority of consumers (71%) say their household income is about the same as it was a year ago. Only 18% of consumers say their income is higher than a year ago.
Rental Prices
Consumers expect rental prices to increase 6.0% on average (a 0.3 percentage-point increase MoM) and home prices to increase 2.6% on average (a 0.5 percentage-point increase MoM) over the next year.
The share of consumers who expect home rental prices to go up (64%) decreased three percentage points from last month, while the share who expect rental prices to go down increased 3 percentage points to 10%. A quarter (25%) of consumers expect home rental prices to stay the same (unchanged for the fourth consecutive month).
What If I Move
The share of consumers who say they would buy a home if they were going to move (66%) increased two percentage points month over month. The share who say they would rent if they were going to move decreased two percentage points month over month to 33%.
Difficult to Get Mortgage
The share of consumers who say getting a mortgage would be difficult increased two percentage points this month (54%), while the share who say getting a mortgage would be easy remained unchanged month over month at 46%.
