Index stays well above last year's level
The Fannie Mae Home Purchase Sentiment Index (HPSI) ended 2024 with a 1.9-point decline in December, settling at 73.1.
Despite the drop, the index remains significantly higher than its level a year ago, driven in part by persistent optimism about falling mortgage rates.
While fewer respondents this month expect rates to decrease - 42% compared to 45% in November - this figure still marks a notable improvement from 31% in December 2023.
Consumer sentiment about the housing market showed mixed results. Those who consider it a good time to buy a home fell slightly to 22% from 23%, while the share who believe it’s a bad time to buy rose to 78% from 77%.
On the selling side, 63% said it’s a good time to sell, down from 64%, while those viewing it as a bad time increased to 36% from 35%.
“Even though the HPSI fell to end the year, consumer sentiment toward the housing market finished 2024 substantially above year-ago levels, attributable in part to respondents’ ongoing expectations that mortgage rates will decline,” said Mark Palim, senior vice president and chief economist at Fannie Mae.
He added that while optimism around home buying has grown since late 2023, many consumers remain discouraged by elevated home prices and mortgage rates.
Palim noted that expectations for a modest decline in mortgage rates, slower home price growth, and higher wages could improve affordability in 2025, though conditions may vary across regions.
The survey also highlighted a steady but cautious outlook on home prices. The share of respondents expecting prices to increase remained unchanged at 38%, while those predicting a decline rose to 27% from 25%. Meanwhile, 35% foresee stable prices, down from 36% in November.
Other findings addressed job stability and income trends. Confidence in job security dipped slightly, with 77% of employed respondents reporting no concerns about losing their job, down from 78% the prior month. Conversely, those worried about job loss increased to 22% from 20%.
On household income, 17% reported higher incomes compared to a year ago, up from 16%, while the share reporting lower incomes fell to 11%.
The HPSI, based on Fannie Mae’s National Housing Survey, condenses consumer attitudes on home buying, selling, pricing, mortgage rates, employment, and income into a single metric. The survey aims to provide insights for industry stakeholders and inform housing market strategies.
Do these survey results reflect your perspective on the housing market? Share your thoughts in the comments.
