Fannie Mae’s Home Purchase Sentiment Index (HPSI)
declined slightly in February as did four of its six components. The Index,
based on a sample of answers to the company’s monthly National Housing Survey,
dipped 1.2 points to 76.5. It is down 16 points from its level in February
2020.

 

 

Consumer sentiment soured significantly on the
question of whether it is a good time to buy a house
. Forty-eight percent of
respondents called it a good time and 43 percent a bad time for a net positive
of 5 percent. This is down 10 points compared to January and 23 points lower
year-over-year.

Attitudes toward selling a home fared
a little better. Those who say it is a good time to sell decreased from 57
percent in January to 55 percent, while the percentage who say it’s a bad time
to sell increased from 33 percent to 35 percent. This left a net 20 percent who
said it was a good time, a 4 percent downturn for the month and 25 percent lower
than a year earlier.

Few respondents see interest rates
declining further, the net who expect lower rates was a negative 39 percent, down
3 points from the prior month. The net of those reporting a higher income over
the previous 12 months also turned negative, with 17 percent reporting an
increase and 19 percent lower income. The remainder reported no or little
change.

The two questions that netted gains,
however, did so decisively with a 5 percent net positive increase in those who
expect home prices to go up (47 percent) against those who expected a decline
(18 percent). This net, however, was 10 percent lower than in February 2019.

Eighty-two percent of respondents
said they were not concerned about losing their jobs
while 17 percent said they
were. The net of 65 percent who were unconcerned was a 14 point monthly
increase although it was down 7 points from the net positive number before the
pandemic emerged.

“As we expected, the HPSI remained
relatively flat in February, but underlying data indicate growing job-related
optimism among consumers, especially among lower-income and renter groups,”
said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. “With
the growing likelihood that lockdown restrictions will continue easing as
vaccination efforts ramp up, and with warmer weather on the horizon and another
round of fiscal stimulus pending, these two segments of consumers may have good
reason to feel more positive about the labor market.

“This optimism appears to be
well-placed, too, given Friday’s jobs report from the Bureau of Labor
Statistics, which showed the strongest net gain in payroll employment since
October, although the unemployment rate remains quite high by historical
standards. However, other components of the index remain well below
pre-pandemic levels, so we believe there may still be room for improvement in
housing and economic attitudes in the coming months,
depending in part on the
future path of mortgage rates.”

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.

By Jann Swanson , dated 2021-03-09 10:38:50

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Courtesy of Mortgage News Daily

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