Following Solid Gains in April, Fannie Mae’s Home Purchasing Sentiment Index® Declines in May

Fannie Mae on Wednesday (6-7-23) released its Home Purchase Sentiment Index® (HPSI) for May. The HPSI decreased by 1.2 points in May to a reading of 65.6, as affordability constraints continue to influence consumers’ perceptions of homebuying and home-selling conditions. Year-over-year, the full HPSI is down 2.6 points.

Month-over-month, four of the HPSI’s six components declined, most notably the component polling consumers’ belief that it is a “good time to buy,” which is once again nearing its survey low. However, the “good time to sell” component increased in May to its highest level since July 2022. Additionally, for the second consecutive month, a greater share of consumers indicated that they expect home prices to increase over the next year.

Adding additional background and his analysis to the HPSI report, Fannie Mae’s Vice President and Deputy Chief Economist Dr. Mark Palim said:

“As we near the end of the spring homebuying season, the latest HPSI results indicate that affordability hurdles, including high home prices and mortgage rates, remain top of mind for consumers, most of whom continue to tell us that it’s a bad time to buy a home but a good time to sell one. Consumers also indicated that they don’t expect these affordability constraints to improve in the near future, with significant majorities thinking that both home prices and mortgage rates will either increase or remain the same over the next year. Notably, the same factors impacting affordability may also be affecting the perceived ease of getting a mortgage. This was particularly true among renters: 81% believe it would be difficult to get a mortgage today, matching a survey high.”