The Fannie Mae Home Purchase Sentiment Index® (HPSI) declined 1.2 points in September to a reading of 74.5. This occurred as survey respondents continue to report opposing opinions of homebuying and home-selling market conditions.
Overall, three of the six HPSI components decreased month-over-month. An increasing number of consumers reported that now is a bad time to purchase a home — with that number currently at 66%, up from 63% in August, and well above the 28% of respondents that believe now is a good time to buy a home.
On the flip-side, the home selling component remained most flat, with a large majority of consumers believing that now is good time to sell.
Year-over-year, the full index is down 6.5 points.
In a statement prepared for the release of he HPSI, Doug Duncan, Fannie Mae Senior Vice President and Chief Economist said, “The HPSI declined slightly this month but remains within the general bounds we’ve seen since the end of last year. The survey’s story is also largely unchanged: Consumers feel it’s a bad time to buy a home but a good time to sell — and they continue to cite high home prices as the primary reason. Across all consumer segments, renters and younger consumers were slightly more likely to indicate it’s a bad time to buy, perhaps a reflection of their generally lower incomes and their observation that the availability of affordable homes is lacking.”
“We’re also seeing a softening in consumers’ expectations that home prices will continue to increase; however, in our view, other housing market fundamentals remain supportive of further home price appreciation — including low levels of inventory and low interest rates,” Duncan added.
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High Home Prices Continue to Weigh on Homebuying Sentiment