Fannie Mae’s Home Purchasing Sentiment Index Increases for January

Fannie Mae reported Tuesday (2-7-23) the results of its latest Home Purchase Sentiment Index® (HPSI). In January, the HPSI increased for the third consecutive month, rising 0.6 points to a reading of 61.6. Three of the indexes’ components posted month-over-month increases, including those associated with home-selling conditions, home price outlook, and household income.

The HPSI distills information about consumers’ home purchase sentiment from Fannie Mae’s National Housing Survey® (NHS) into a single number.

Only 17% of all respondents believe that it’s a good time to buy, likely the result of the ongoing affordability challenges posed by elevated mortgage interest rates. Year-over-year, the full HPSI is down 10.2 points.

Adding additional background information and analysis to the January HPSI, Fannie Mae Senior Vice President and Chief Economist Dr. Doug Duncan said:

“January’s HPSI results showed that consumer sentiment toward the housing market remains subdued by historical standards. For consumers, the same affordability issues are persisting, as they continue to indicate that high home prices and high mortgage rates make it a ‘bad time to buy’ a home. The latest survey data also indicated that the majority of consumers expect home prices to decrease or remain flat over the next year, which may incentivize some potential homebuyers to delay their purchase decision. Although ‘good time to sell’ sentiment ticked upward this month, it’s still much lower than it was a year ago, as purchase affordability remains seriously constrained and mortgage demand has receded. Until we see improvements in affordability via lower home prices and mortgage rates, we expect home sales to remain muted in the coming months.”