Fannie Mae Home Purchase Sentiment Index® Trends Lower in August

Fannie Mae today (10-7-22) released its Home Purchase Sentiment Index® for September. The HPSI fell 1.2 points to a reading of 60.8. This marks the seventh consecutive monthly decline, as affordability constraints continue to grow and further sour consumer home buying and selling sentiment. Year-over-year, the full index is down 13.7 points.

Surveyed consumers reported expectations that mortgage rates will move higher over the next year, and, for the first time since May 2020, a majority of respondents expected home prices to decline. In September, only 19% of consumers indicated that it was a good time to buy a home—down from 22% in August—while 59% indicated that it is a good time to sell.

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

“The HPSI declined this month to its lowest level since October 2011. Consumers’ expectation that home prices will decrease matched a survey high, with a higher percentage of consumers believing home prices will decrease rather than increase over the next year—a shift in survey sentiment that had previously only happened in 2011 and at the start of the pandemic in 2020. Moreover, 75% of consumers still think it’s a bad time to buy a home, with most citing high home prices and unfavorable economic and mortgage rate conditions as primary reasons. As long as supply is limited and affordability pressures continue to constrain potential homebuyers via elevated home prices and mortgage rates, we expect home sales will remain sluggish.”