Fannie Mae Home Purchase Sentiment Index for October at Lowest Level Since 2011

Fannie Mae today (11-7-22) released its Home Purchase Sentiment Index® for October. The HPSI dropped 4.1 points to a reading of 56.7, its eighth consecutive monthly decline. This marks the lowest level since 2011 and well below the all-time high that was set in 2019.

Consumers remain pessimistic about homebuying conditions, according to the HPSI. Only 16% of the respondents to the survey thought it was a good time to buy a home. The percentage of consumers believing it was a good time to sell a home continued its decline as well, falling from 59% in September to 59% in October.

Overall, five of the six index components decreased month-over-month, including the component associated with home buying and selling conditions, as persistently high home prices and unfavorable mortgage rates continue to fuel consumer housing affordability concerns. Year over year, the full index is down 18.8 points.

Doug Duncan, Fannie Mae’s Senior Vice President and Chief Economist, added his analysis and insight:

“The HPSI reached an all-time survey low this month, in line with expectations that the housing market will continue to cool in the months ahead. Consumers are increasingly pessimistic about both homebuying and home-selling conditions. Amid persistently high home prices and unfavorable mortgage rates, the ‘bad time to buy’ component increased to a new survey high this month, while the ‘good time to sell’ component continued its downward trend. Consumers also remain concerned about the movement of home prices—expectations that prices will decrease reached a new survey high, particularly among homeowners—offering further support to our forecast of home price declines in 2023. As continued affordability constraints reduce homebuyer demand, and homeowners become reluctant to sell at potentially reduced prices, we expect home sales to slow even further in the coming months, consistent with our forecast.”