Fannie Mae’s Home Purchasing Sentiment Index Rebounds in June

Fannie Mae on Monday (7-8-24), released the results of its June, Home Purchase Sentiment Index (HPSI). According to the HPSI the component that measures consumers attitudes toward homebuying increased 3.2 points to a reading of 72.6, rebounding from last month’s dip and returning the index nearer the plateau it set earlier in the year.

In June, 19% of consumers indicated that it’s a good time to buy a home, up from 14% in May, which represented a new survey low. The share believing it’s a good time to sell also increased, rising from 64% to 66%. Greater shares of consumers also indicated belief that home prices and mortgage rates would rise over the next 12 months. Among the household finance components, the percentage of consumers expressing a sense of job security jumped to 79%, an increase of 4 percentage points compared to May. Year-over-year (Jun. 23 – Jun. 24) the full index is up 6.6 points.

Adding additional background to the May HPSI, Fannie Mae’s Vice President, and Deputy Chief Economist – Dr. Mark Palim – Ph.D. – said, “Affordability concerns remain the primary driver of consumer housing sentiment, even as the topline findings from our monthly survey showed a modest uptick in optimism on both homebuying and home-selling conditions. If mortgage rates decline through the end of the year, as we currently forecast, we do think home sales activity will pick up, but progress on that front is likely to be slow due to the ongoing imbalance between supply and demand. A significant majority of consumers continue to tell us that it’s a ‘bad time’ to buy a home, and they’re also telling us that they expect both home prices and mortgage rates to move higher over the next 12 months. Taken together, in our view, this leaves little upside to overall sentiment until meaningful progress is made on affordability – most likely in the form of either lower rates or improved supply. Of course, the flip side to a difficult purchase market is an advantageous sales market, and respondents also maintained their position that it’s a generally good time to sell, pointing to high home prices as the primary reason.”