Fannie Mae’s Home Purchase Sentiment Index Declines Month-Over-Month and Year-Over-Year in February
On Tuesday (3-7-23), Fannie Mae released its Home Purchase Sentiment Index® (HPSI) for February. According to the report, the HPSI fell 3.6 points in February to a reading of 58.0. The decline ends a streak of three consecutive monthly gains, returning the HPSI closer to its all-time survey low set in October 2022.
Overall, four of the HPSI’s six components decreased month-over-month, most notably those associated with job security and home-selling conditions. While both components remain positive on net, 44% of consumers reported that it was a bad time to sell a home in February, up from 39% in January, and 24% expressed concern about losing their employment in the next 12 months, up from 18% a month ago. Year-over-year, the full HPSI is down 17.3 points.
Adding additional background and his expert analysis to the February HPSI, Fannie Mae’s Senior Vice President and Chief Economist Dr. Doug Duncan said:
“The HPSI declined this month and is now slightly above the survey low set late last year. The decline was partly driven by substantial decrease in consumers’ sense of home-selling conditions, with most respondents who indicated it’s a ‘bad time to sell’ citing unfavorable economic conditions and mortgage rates as the primary reasons for that belief. With home-selling sentiment now lower than it was pre-pandemic—and homebuying sentiment remaining near its all-time low—consumers on both sides of the transaction appear to be feeling cautious about the housing market. We believe these results corroborate our expectation for subdued home sales in the coming quarters, particularly now that mortgage rates have begun rising again. Additionally, this month’s survey indicated an increase in job security concerns, which we’ll continue to monitor closely, since labor market uncertainty could play yet another factor in slowing housing activity.”
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