Fannie Mae said “Consumers are increasingly adamant that
it’s a good time to sell, bad time to buy a home” as it released its June Home
Purchase Sentiment Index (HPSI). The index, based on the company’s monthly
National Housing Survey, shows a growing difference in the number of consumers
who hold one or another of those opinions.
The HPSI was largely unchanged in June, dipping from 80.0 in May to
79.7, but questions of whether it is a good time to buy a home or to sell one produced
notable results. Only 32 percent of survey respondents said it was a good time
to buy, down from 35 percent in May and with an 8 point increase in those who
thought it was not. As a result, the net
who were upbeat about buying fell 11 points to -32 percent, 66 points lower
than in June 2020. Conversely, the net who said it was a good time to sell rose
20 points in June to 62 percent and was 69 points higher than at the same time
“The HPSI remained flat this month,
although its underlying buy and sell components continued to diverge, setting
record positive and negative readings, respectively,” said Doug Duncan, Fannie
Mae Senior Vice President and Chief Economist. “Consumers also continued to
cite high home prices as the predominant reason for their ongoing and
significant divergence in sentiment toward homebuying and home-selling
conditions. While all surveyed segments have expressed greater negativity
toward homebuying over the last few months, renters who say they are planning
to buy a home in the next few years have demonstrated an even steeper decline
in homebuying sentiment than homeowners. It’s likely that affordability
concerns are more greatly affecting those who aspire to be first-time
homeowners than other consumer segments who have already established
The percentage of respondents who
say home prices will go up in the next 12 months gained one point to 48 percent
while the percentage who expect a decline went from 17 percent to 21 percent.
There was a 4 point increase in those who expect no change. The net who
expected an increase was 27 percent, down 3 points for the month but 18 points
higher than last June.
More than half of respondents expect
mortgage rates to go up, resulting in a net of -52 percent who expect further
declines. This is 8 points lower than May.
Job confidence increased slightly. The
number of respondents who said they were concerned about losing their jobs
dipped 1 point to 11 percent with a corresponding increase in the share who
said they were not. The net who were not concerned rose 2 points to 77 percent.
There was, however, a net decline in
those who said their household income had increased significantly over the last
year. More than half of respondents reported no change with the net who said
their situation had improved was down 2 points to 14 percent.
Duncan continued: “Despite the
pessimism in homebuying conditions, we expect demand for housing to persist at
an elevated level through the rest of the year. Mortgage rates remain not too
far from their historical lows, and consumers are expressing even greater
confidence about their household income and job situation compared to this time
last year, when the pandemic had shut down wide swaths of the economy.”
The HPSI is up 3.2 percent compared to June 2020.
The National Housing Survey from
which the HPSI is constructed, is conducted monthly by telephone among 1,000
consumers, both homeowners and renters. In addition to the six questions that
are the framework of the index, respondents are asked questions about the
economy, personal finances, attitudes about getting a mortgage, and questions
to track attitudinal shifts.