According to the latest Fannie Mae Home Purchasing Sentiment Index® (HPSI) consumer confidence, in housing dipped 2.3 points in July, to a reading of 74. Thus, ending two straight months of advances. Three of the six HPSI components decreased month over month, with consumers reporting a significantly more pessimistic view of home buying conditions but a more optimistic view of home selling conditions. Year over year, the HPSI is down 19.5 points. Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae in prepared remarks about the HPSI said, “Following a partial recovery of the HPSI in the previous two months, consumer sentiment toward housing took a slight step back in July amid a rise in coronavirus infections across many parts of the country, including the south and southwest. Supply constraints appear to be applying upward pressure to consumers’ home price expectations, which in turn has contributed to both a sharp reversal in optimism about whether it is a good time to buy a home and further improvement in home-selling sentiment. The July survey was conducted as legislators considered the extension of several provisions in the CARES Act to support household incomes during the pandemic. Not surprisingly – more than any other respondent groups – renters, 18-to-34-year old’s, and households earning less than $100,000 think it’s a bad time to buy a home, which we believe suggests a less favorable outlook for first-time homebuying activity. In the months ahead, we continue to expect consumer sentiment to be closely linked to the country’s progress in containing the spread of the virus.”
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