HPSI Flat, But Consumers Slightly More Optimistic About Homebuying Conditions for First Time Since March

Rhea-AI Summary

Fannie Mae's Home Purchase Sentiment Index (HPSI) remained stable in August 2021, declining slightly by 0.1 points to 75.7, indicating tempered consumer views on homebuying conditions. Key findings include an increase in the percentage of respondents who believe it's a good time to buy (up to 32%) and a decrease in those expecting home prices to rise (down to 40%). Year-over-year, the index is down 1.8 points. Concerns about job stability are rising, with 15% now expressing worry about job loss, up from 13%. Overall, the sentiment reflects ongoing demand amid rising inflation and the Delta variant concerns.

Positive

• Increase in positive sentiment about homebuying: Good time to buy rose from 28% to 32%.
• Mortgage rate expectations improving: 6% expect rates to decrease in the next 12 months.

Negative

• HPSI down 1.8 points year-over-year, indicating a general decline in sentiment.
• Declining home price growth expectations: 40% expect prices to rise, down from 46%.
• Job security concerns increased: 15% express fear of job loss, up from 13%.

WASHINGTON, Sept. 7, 2021 /PRNewswire/ -- The Fannie Mae (OTCQB: FNMA) Home Purchase Sentiment Index^® (HPSI) was largely unchanged in August, decreasing 0.1 points to 75.7, as survey respondents tempered both their recent pessimism about homebuying conditions and their upward expectations of home price growth. Overall, three of the index's six components increased month over month, while the other three decreased. Most notably, a greater share of consumers believes it's a good time to buy a home – though that population remains firmly in the minority at only 32 percent – while the ongoing plurality of respondents who expect home prices to go up over the next 12 months declined to 40 percent, down from last month's 46 percent but still well above the 24 percent of consumers who believe home prices will decline. Year over year, the full index is down 1.8 points.

"The HPSI remained relatively flat this month, suggesting to us that the continued strength of demand for housing and favorable home-selling conditions may be offsetting broader concerns about the Delta variant and inflation that have negatively impacted other consumer confidence indices," said Mark Palim, Fannie Mae Vice President and Deputy Chief Economist. "Most consumers continue to report that it's a good time to sell a home – but a bad time to buy – and they most frequently cite high home prices and a lack of supply as their primary rationale. However, the 'good time to buy' component, while still near a survey low, did tick up for the first time since March, perhaps owing in part to the favorable mortgage rate environment and growing expectations that home price growth will begin to moderate over the next twelve months."

Home Purchase Sentiment Index – Component Highlights

Fannie Mae's Home Purchase Sentiment Index (HPSI) decreased in August by 0.1 points to 75.7. The HPSI is down 1.8 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 28% to 32%, while the percentage who say it is a bad time to buy decreased from 66% to 63%. As a result, the net share of those who say it is a good time to buy increased 7 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 decreased from 75% to 73%, while the percentage who say it's a bad time to sell decreased from 20% to 19%. As a result, the net share of those who say it is a good time to sell decreased 1 percentage point month over month.
• Home Price Expectations: The percentage of respondents who say home prices will go up in the next 12 months decreased from 46% to 40%, while the percentage who say home prices will go down increased from 21% to 24%. The share who think home prices will stay the same increased from 27% to 31%. As a result, the net share of Americans who say home prices will go up decreased 9 percentage points month over month.
• Mortgage Rate Expectations: The percentage of respondents who say mortgage rates will go down in the next 12 months increased from 5% to 6%, while the percentage who expect mortgage rates to go up decreased from 57% to 53%. The share who think mortgage rates will stay the same increased from 31% to 35%. As a result, the net share of Americans who say mortgage rates will go down over the next 12 months increased 5 percentage point month over month.
• Job Concerns: The percentage of respondents who say they are not concerned about losing their job in the next 12 months decreased from 84% to 82%, while the percentage who say they are concerned increased from 13% to 15%. As a result, the net share of Americans who say they are not concerned about losing their job decreased 4 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 decreased from 27% to 26%, while the percentage who say their household income is significantly lower decreased from 14% to 12%. The percentage who say their household income is about the same increased from 56% to 59%. As a result, the net share of those who say their household income is significantly higher than it was 12 months ago increased 1 percentage point 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 most detailed consumer attitudinal survey of its kind, Fannie Mae's National Housing Survey (NHS) polled approximately 1,000 respondents via live telephone interview to assess their attitudes toward owning and renting a home, home and rental price changes, homeownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used 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 August 2021 National Housing Survey was conducted between August 1, 2021 and August 23, 2021. Most of the data collection occurred during the first two weeks of this period. Interviews were conducted by PSB, in coordination with Fannie Mae.

Detailed HPSI & NHS Findings
For detailed findings from the August 2021 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 Fannie Mae
Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of people in America. We partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing finance to make the home buying process easier, while reducing costs and risk. To learn more, visit:
fanniemae.com | Twitter | Facebook | LinkedIn | Instagram | YouTube | Blog

Fannie Mae Newsroom
https://www.fanniemae.com/news

Photo of Fannie Mae
https://www.fanniemae.com/resources/img/about-fm/fm-building.tif

Fannie Mae Resource Center
1-800-2FANNIE

Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's Economic & Strategic Research (ESR) Group 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 as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.

View original content to download multimedia:https://www.prnewswire.com/news-releases/hpsi-flat-but-consumers-slightly-more-optimistic-about-homebuying-conditions-for-first-time-since-march-301369319.html

SOURCE Fannie Mae

FAQ

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

The latest HPSI for FNMA is 75.7, reflecting a 0.1 point decrease in August 2021.

How have consumer sentiments about homebuying changed in August 2021 for FNMA?

In August 2021, 32% of respondents felt it was a good time to buy a home, up from 28% in July.

What are the expectations for home price growth according to FNMA's survey?

40% of respondents expect home prices to increase in the next 12 months, down from 46% last month.

How have job security concerns changed in FNMA's recent survey?

The percentage of respondents concerned about losing their job increased from 13% to 15%.