Home-Selling Sentiment Moves Higher Ahead of Spring Homebuying Season

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Fannie Mae's Home Purchase Sentiment Index (HPSI) rose to 72.8, the highest level in nearly 2 years, driven by increased optimism in home-selling conditions. The index increased for the third consecutive month, with 65% of consumers viewing it as a good time to sell a home. However, only 19% feel it's a good time to buy. Despite a slight decrease in the expectation of lower mortgage rates, the overall index is up 14.8 points year over year.

HPSI Inches Upward Again, Now at Highest Level in Nearly 2 Years

WASHINGTON, March 7, 2024 /PRNewswire/ -- The Fannie Mae (OTCQB: FNMA) Home Purchase Sentiment Index^® (HPSI) increased 2.1 points in February to 72.8, inching higher for the third consecutive month, due primarily to increased optimism around home-selling conditions. In February, 65% of consumers said it's a good time to sell a home, up from 60% last month. The share of those who believe it's a good time to buy a home ticked up slightly this month but remains at an extremely pessimistic 19%. Additionally, a plurality of consumers continues to believe that mortgage rates will go down over the next 12 months, although on net that component fell slightly this month. Overall, the full index is up 14.8 points year over year.

"The HPSI increased for the third straight month, continuing its slow but steady rise from the low-level plateau observed through much of 2023; and consumer sentiment toward housing now rests firmly above where it was this time last year," said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. "Consumer attitudes toward home-selling conditions increased markedly in February, with current homeowners, in particular, expressing greater optimism that it's a 'good time to sell,' a development that may foreshadow an upcoming increase in existing home listings. Additionally, despite the recent uptick in rates, consumers remain relatively optimistic that mortgage rates will decrease over the next 12 months. If their expectations come true and rates move closer to the 6-percent mark by the end of 2024, as we currently expect, then it's likely that consumer sentiment on both sides of the transaction will improve, perhaps leading to a further thawing of the housing market. A decline in mortgage rates – and the resulting uptick in sentiment – would obviously bode well for the upcoming spring homebuying season, although affordability will likely remain a significant challenge for buyers, at least until there's a meaningful addition to net supply."

Home Purchase Sentiment Index – Component Highlights

Fannie Mae's Home Purchase Sentiment Index (HPSI) increased in February by 2.1 points to 72.8. The HPSI is up 14.8 points compared to the same time last year. Read the full research report for additional information.

• Good/Bad Time to Buy: The percentage of respondents who say it is a good time to buy a home increased from 17% to 19%, while the percentage who say it is a bad time to buy decreased from 83% to 81%. As a result, the net share of those who say it is a good time to buy increased 4 percentage points month over month.
• Good/Bad Time to Sell: The percentage of respondents who say it is a good time to sell a home increased from 60% to 65%, while the percentage who say it's a bad time to sell decreased from 40% to 35%. As a result, the net share of those who say it is a good time to sell increased 11 percentage points month over month.
• Home Price Expectations: The percentage of respondents who say home prices will go up in the next 12 months increased from 37% to 42%, while the percentage who say home prices will go down increased from 22% to 23%. The share who think home prices will stay the same decreased from 40% to 34%. As a result, the net share of those who say home prices will go up in the next 12 months increased 4 percentage points over month.
• Mortgage Rate Expectations: The percentage of respondents who say mortgage rates will go down in the next 12 months decreased from 36% to 35%, while the percentage who expect mortgage rates to go up increased from 28% to 32%. The share who think mortgage rates will stay the same decreased from 35% to 32%. As a result, the net share of those who say mortgage rates will go down over the next 12 months decreased 5 percentage points month over month.
• Job Loss Concern: The percentage of respondents who say they are not concerned about losing their job in the next 12 months decreased from 82% to 78%, while the percentage who say they are concerned increased from 18% to 22%. As a result, the net share of those who say they are not concerned about losing their job decreased 8 percentage points month over month.
• Household Income: The percentage of respondents who say their household income is significantly higher than it was 12 months ago increased from 17% to 19%, while the percentage who say their household income is significantly lower decreased from 13% to 11%. The percentage who say their household income is about the same increased from 69% to 70%. As a result, the net share of those who say their household income is significantly higher than it was 12 months ago increased 5 percentage points month over month.

About Fannie Mae's Home Purchase Sentiment Index
The Home Purchase Sentiment Index^® (HPSI) distills information about consumers' home purchase sentiment from Fannie Mae's National Housing Survey^® (NHS) into a single number. The HPSI reflects consumers' current views and forward-looking expectations of housing market conditions and complements existing data sources to inform housing-related analysis and decision making. The HPSI is constructed from answers to six NHS questions that solicit consumers' evaluations of housing market conditions and address topics that are related to their home purchase decisions. The questions ask consumers whether they think that it is a good or bad time to buy or to sell a house, what direction they expect home prices and mortgage interest rates to move, how concerned they are about losing their jobs, and whether their incomes are higher than they were a year earlier.

About Fannie Mae's National Housing Survey
The National Housing Survey (NHS) is a monthly attitudinal survey, launched in 2010, which polls the adult general population of the United States to assess their attitudes toward owning and renting a home, purchase and rental prices, household finances, and overall confidence in the economy. Each respondent is asked more than 100 questions, making the NHS one of the most detailed attitudinal longitudinal surveys of its kind, to track attitudinal shifts, six of which are used to construct the HPSI (findings are compared with the same survey conducted monthly beginning June 2010). For more information, please see the Technical Notes.

Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to support the housing market. The February 2024 National Housing Survey was conducted between February 1, 2024 and February 19, 2024. Most of the data collection occurred during the first two weeks of this period. The latest NHS was conducted exclusively through AmeriSpeak^®, NORC at the University of Chicago's probability-based panel, on behalf of PSB Insights and in coordination with Fannie Mae. Calculations are made using unrounded and weighted respondent level data to help ensure precision in NHS results from wave to wave. As a result, minor differences in calculated data (summarized results, net calculations, etc.) of up to 1 percentage point may occur due to rounding.

Detailed HPSI & NHS Findings
For detailed findings from the Home Purchase Sentiment Index and National Housing Survey, as well as a brief HPSI overview and detailed white paper, technical notes on the NHS methodology, and questions asked of respondents associated with each monthly indicator, please visit the Surveys page on fanniemae.com. Also available on the site are in-depth special topic studies, which provide a detailed assessment of combined data results from three monthly studies of NHS results.

To receive e-mail updates with other housing market research from Fannie Mae's Economic & Strategic Research Group, please click here.

About the ESR Group
Fannie Mae's Economic and Strategic Research Group, led by Chief Economist Doug Duncan, studies current data, analyzes historical and emerging trends, and conducts surveys of consumer and mortgage lender groups to provide forecasts and analyses on the economy, housing, and mortgage markets. The ESR Group was awarded the prestigious 2022 Lawrence R. Klein Award for Blue Chip Forecast Accuracy based on the accuracy of its macroeconomic forecasts published over the 4-year period from 2018 to 2021.

About Fannie Mae
Fannie Mae advances equitable and sustainable access to homeownership and quality, affordable rental housing for millions of people across America. We enable the 30-year fixed-rate mortgage and drive responsible innovation to make homebuying and renting easier, fairer, and more accessible. To learn more, visit:
fanniemae.com | Twitter | Facebook | LinkedIn | Instagram | YouTube | Blog

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https://www.fanniemae.com/news

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Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's Economic & Strategic Research (ESR) Group or survey respondents included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the ESR Group represent the views of that group or survey respondents as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.

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FAQ

What is Fannie Mae's ticker symbol?

Fannie Mae's ticker symbol is FNMA.

What is the latest Home Purchase Sentiment Index (HPSI) for Fannie Mae?

Fannie Mae's Home Purchase Sentiment Index (HPSI) is at 72.8, the highest level in nearly 2 years.

How much did the HPSI increase by in February?

The HPSI increased by 2.1 points in February.

What percentage of consumers believe it's a good time to sell a home?

65% of consumers believe it's a good time to sell a home.

What percentage of consumers think it's a good time to buy a home?

Only 19% of consumers think it's a good time to buy a home.

How much did the net share of those who say it's a good time to buy increase by?

The net share of those who say it's a good time to buy increased by 4 percentage points month over month.

What are consumers' expectations regarding mortgage rates over the next 12 months?

Consumers remain relatively optimistic that mortgage rates will decrease over the next 12 months, although the expectation decreased slightly this month.

Who commented on the increase in the HPSI?

Doug Duncan, Fannie Mae Senior Vice President and Chief Economist, commented on the increase in the HPSI.