Fannie Mae’s Home Purchase Sentiment Index Unchanged in April as Homebuyers Adjust to Higher Mortgage Rates

On Tuesday, Fannie Mae released the results of its latest Home Purchase Sentiment Index® (HPSI). The HPSI was unchanged in April, holding at a reading of 71.9, and is showing signs of plateauing once again as consumers continue to adjust to the higher interest rate and home price environment.

Year-over-year, the full HPSI is up 5.1 points.

In April, 67% of consumers indicated that it’s a “good time to sell” a home, while only 20% said it’s a “good time to buy” a home. These two indicators are up 10 percentage points and 3 percentage points, respectively, since the end of 2023 despite mortgage rates having moved steadily higher during the period.

Additionally, the share of respondents who expect mortgage rates to go down over the next 12 months fell to 26%.

Adding background and analysis to the April HPSI, Fannie Mae Senior Vice President and Chief Economist Doug Duncan said:

“The HPSI, unchanged this month, may have hit another plateau as consumers maintain their ‘wait and see’ approach to the housing market. Overall, housing sentiment increased from November through February, driven largely by consumer belief that mortgage rates would move lower. However, recent data showing stickier-than-expected inflation, rising mortgage rates, and continued home price appreciation appear to have given consumers pause regarding the market’s direction. While only 20% of consumers think it’s a good time to buy a home, 67% think it’s a good time to sell one, a share that’s moved steadily upward since the start of the year.

We think consumers’ generally improved sense of home-selling conditions bodes well for listings and housing activity, particularly for the segment of the population who may need to move for lifestyle reasons and have already begun adjusting their financial expectations to the current mortgage rate and price environment. However, for potential homebuyers in less of a rush to transact, ongoing affordability challenges may continue to keep many of them on the sidelines—one reason why we expect home sales to tick up only gradually over the course of the year.”