The Fannie Mae Home Purchase Sentiment Index®(HPSI), which reflects consumers’ current views and forward-looking expectations of housing market conditions and complements existing data sources to inform housing-related analysis, decreased 3.9 points to a reading of 75.8 in July. This occured as consumers continue to report concerns related to high home pries and a lack of homes for sale.
All six components of the HPSI declined month-over-month. However, the “Good Time to Buy” and “Good Time to Sell” components once again produced the most notable results. On the buy-side, 66% of respondents said it’s a bad time to buy a home, up from 64% last month; while on the sell-side, 75% of respondents said it’s a good time to sell, down slightly from 77% percent last month. Year over year, the overall index is up 1.6%.
In a statement prepared for the release of the July HPSI, Doug Duncan, Fannie Mae’s Senior Vice President and Chief Economist, said, “Historically prime homebuying groups appear to be increasingly sensitive to the lack of affordability, as home prices continue to increase and homes for sale remain in short supply. While all surveyed consumer segments have reported increased pessimism toward homebuying conditions over the past several months, two of the segments perhaps best positioned to purchase — consumers aged 35-44 and those with middle-to-higher income levels — have indicated even more pessimism than other groups.”
Duncan added, “Overall, the HPSI remains within a tight range established a few months after the onset of the pandemic in 2020. Consumer sentiment toward homebuying hit yet another survey low in July, continuing the sharp downward trend established in March. The percentage of respondents citing high home prices as the top reason for it being a ‘bad time to buy’ also reached an all-time high. On the flip side, selling sentiment remains extremely high, and well above pre-pandemic levels, for the same commonly cited reason: high home prices.”
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Homebuying and Selling Sentiment Remain Polarized Amid Affordability and Supply Concerns