WASHINGTON, DC – The Home Purchase Sentiment Index (HPSI) jumped 5.5 points in March to 89.8, reversing last month’s slight decline and reaching its highest point since June 2018, according to Fannie Mae.
Increases in the “Good Time to Buy” and “Good Time to Sell” components drove the measure of consumer sentiment higher, with the two rising seven and 13 percentage points, respectively. Complementing that rise, more consumers on net expect interest rates to fall within the next 12 months, as that component rose 7 percentage points this month, Fannie Mae said.
‘Brighter Housing Market’
“A brighter housing market outlook drove this month’s increase in the HPSI – a welcome sign from consumers as we enter the spring and summer homebuying seasons,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The results further corroborate the positive effect of falling mortgage rates on affordability, which we expect will help support a rebound in home sales.”
“Continuing a five-month trend, the net share of consumers who believe mortgage rates will go down increased 7 percentage points amid a 35 basis-point drop in mortgage rates in March alone,” continued Duncan. “Meanwhile, job confidence – little changed from last month’s survey high – also continues to support housing sentiment, while income growth perceptions firmed from both prior month and year-ago levels, potentially supporting an uptick in housing demand. Additionally, consumers appear to have regained some confidence in the housing market, with perceptions of both home buying and home selling conditions returning to their longer-term trends.”
Other Index highlights, according to Fannie Mae:
- The net share of Americans who say it is a good time to buy a home increased seven percentage points to 22%. This component is down 10 percentage points from the same time last year.
- The net share of those who say it is a good time to sell a home increased 13 percentage points to 43%. This component is up four percentage points from the same time last year.
- The net share of those who say home prices will go up increased five percentage points to 38%. This component is down four percentage points from the same time last year.
- The net share of Americans who say mortgage rates will go down over the next 12 months increased seven percentage points to -45%. This component is up seven percentage points from the same time last year, Fannie Mae said.
- The net share of Americans who say they are not concerned about losing their job decreased one percentage point to 80%. This component is up nine percentage points from the same time last year.
- The net share of those who say their household income is significantly higher than it was 12 months ago increased two percentage points to 20%. This component is up three percentage points from the same time last year.