Fannie Mae Releases Home Purchase Sentiment Index® for January 2022

Fannie Mae today (2-7-22) released their Home Purchase Sentiment Index® (HPSI) for January 2022. The HPSI distills information about consumers’ home purchasing sentiment from Fannie Mae’s National Housing Survey® (NHS) into a single number. The HPSI for January decreased -2.4 points to 71.8 in January, its lowest level since May 2020, as affordability constraints continue to weigh on the housing market.

Overall, four of the index’s six HPSI components decreased month over month, including the components measuring consumers’ perceptions of homebuying and home-selling conditions. In January, a survey record-low 25% of respondents reported that it’s a good time to buy a home, compared to the 69% of consumers who reported that it’s a good time to sell. Consumers also reported greater concerns about job stability and the future path of mortgage rates. Year over year, the full index is down -5.9 points.

In a statement prepared for the release of the January HPSI, Doug Duncan, Fannie Mae Senior Vice President and Chief Economist said, “Consumer sentiment toward housing softened further in January—the HPSI fell 2.4 points to 71.8—as affordability and supply constraints continue to limit home purchase opportunities, particularly among younger households. Younger consumers—more so than other groups—expect home prices to rise even further, and they also reported a greater sense of macroeconomic pessimism. Additionally, while the younger respondents are typically the most optimistic about their future finances, this month their sense of optimism around their personal financial situation declined. All of this points back to the current lack of affordable housing stock, as younger generations appear to be feeling it particularly acutely and, absent an uptick in supply, may have their homeownership aspirations delayed. On the whole, the latest HPSI results are consistent with our forecast of slowing housing activity in the coming year.”