Fannie Mae’s Home Purchase Sentiment Index® Lower Month-Over-Month & Year-Over-Year in May 2022

Fannie Mae today (6-7-22) released its Home Purchase Sentiment Index® (HPSI) for May. The HPSI distills information about consumers’ home purchase sentiment from Fannie Mae’s National Housing Survey® (NHS) into a single number.

According to the report, the HPSI declined in May by -0.3 points to a reading of 68.2. The index is now closer to its 10-year and pandemic-low of 63.0, recorded in April of 2020. Year-over-year (May 2021 – May 2022) the HPSI is down 11.8 points.

Consumers surveyed continue to express concerns about housing affordability, with the “Good Time to Buy” indicator reaching a new survey low, as 79% of respondents reported that it’s a bad time to buy a home. In addition, 70% of respondents expect mortgage rates to continue their recent ascent over the next 12 months.

A greater share of consumers also expressed concern that they may lose their job in the next 12 months, but that component remains firmly positive generally, with only 16% of consumers expressing pessimism.

In a statement prepared for today’s release of the HPSI for May, Doug Duncan, Fannie Mae Senior Vice President and Chief Economist, said:

“Consumers’ expectations that their personal financial situations will worsen over the next year reached an all-time high in the May survey, and they expressed greater concern about job security. Further, respondents’ pessimism regarding homebuying conditions carried forward into May, with the percentage of respondents reporting it’s a bad time to buy a home hitting a new survey high. The share reporting that it’s ‘easy to get a mortgage’ also decreased across almost all segments.

These results suggest to us that increased mortgage rates, high home prices, and inflation will likely continue to squeeze would-be homebuyers—as well as those potential sellers with lower, locked-in mortgage rates—out of the market, supporting our forecast that home sales will slow meaningfully through the rest of this year and into next.”