Fannie Mae today (12-7-21) released their Home Purchase Sentiment Index® (HPSI) for November. The HPSI distills information about consumers’ home purchasing sentiment from Fannie Mae’s National Housing Survey® (NHS) into a single number. The HPSI for November decreased -0.8 points to a reading of 74.7, as consumers expressed only contrasting views of homebuying and home-selling conditions but also their greatest economic pessimism in 10-years.
Overall, four of the index’s six components decreased month over month. In November, 74% of respondents reported that it’s a good time to sell a home, compared to the 29% of consumers who reported that it’s a good time to buy. Consumers also continued to report strong expectations that mortgage rates will increase over the next 12 months, and they expressed even greater pessimism about the direction of the economy, with 70% saying it’s on the wrong track. Year over year, the full index is down 5.3 points.
In a statement prepared for the release of the November HPSI, Mark Palim, Fannie Mae Vice President and Deputy Chief Economist said, “The HPSI experienced some shuffling among its underlying components in November, but the overall index once again stayed relatively flat. While consumers expressed even greater concern regarding the direction of the economy, with the share of respondents expressing pessimism hitting a 10-year high, overall housing sentiment remained stable. Consumers’ concerns for their personal job situation have eased and respondents also reported feeling better about their income level compared to a year ago, with both of those components now nearing their pre-COVID levels.”
“Even though consumers are reporting broader macroeconomic concerns — with much of it likely tied to inflation — so far any negative sentiment tied to the economy has not translated into a meaningful decrease in actual purchase mortgage demand,” Palim added. “According to this month’s survey, an even greater share of consumers (particularly those with low and moderate incomes) expects mortgage rates to go up in the next 12 months, which may be a signal that some households plan to pull-forward their home purchase plans despite growing economic apprehension.”
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