Purchase Sentiment Index gained even as 4 in 10 expect higher prices
Housing purchase sentiment rebounded last month following a slight decline in February.
Fannie Mae’s Home Purchase Sentiment Index gained 5.5% to hit 89.8. That’s a 1.5% rise from a year ago and the highest reading since June 2018.
There was a 7 percentage point rise in the index’s ‘good time to buy’ component (22% of consumers said it is) and a 13 percentage point rise in the ‘good time to sell’ component (43%).
"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."
Consumers expect lower rates, higher prices
The index shows a 7 percentage point rise in the net share of consumers who believe mortgage rates will fall over the next 12 months (-45%).
This continues the trend of the last five months and follows a decrease of 35 basis points in mortgage rates last month alone.
"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,” added Duncan. “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."
The net share of those who say home prices will go up increased 5 percentage points to 38%. This component is down 4 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 2 percentage points to 20%. This component is up 3 percentage
