WASHINGTON – Nov. 10, 2016 – Though they say it’s still a good time to buy or sell a home, Americans are growing more cautious about the housing market.
Fannie Mae’s latest Home Purchase Sentiment Index (HPSI), which measures attitudes toward the economy and personal finances, shows an overall dip in confidence among the American public in four of the six components it measures.
The number of consumers reporting significantly higher incomes over the past year saw the largest drop among all measures in October – falling 8 percentage points – according to the index, which is based on a survey of 1,000 Americans. Also, the net share of consumers expecting home prices to rise in the next year decreased three percentage points.
Americans who say mortgage rates will drop and those who are confident about not losing their job both showed decreases by 1 percentage point in October.
“The HPSI fell in October for the third straight month from its record high in July, reaching the lowest level since March,” says Doug Duncan, Fannie Mae’s chief economist. “Recent erosion in sentiment likely reflects, in part, enhanced uncertainty facing consumers today. Since July, more consumers, on net, have steadily expected mortgage rates to rise and home-price appreciation to moderate. Furthermore, consumers’ perception of their income over the past year deteriorated sharply in October to the worst showing since early 2013, weighing on the index. However, this component of the HPSI is volatile from month to month, and the firming trend in wage gains from the October jobs report, if sustained, may foreshadow an improving view in the near future.”
Additional findings from Fannie Mae’s HPSI October reading
31% of Americans say it is a good time to buy a house, a 2 percentage point month-over-month increase. Still, the share who says it is a good time to buy remains at an all-time survey low.
19% of Americans say it is a good time to sell, a 4 percentage point month-over-month increase and 1 percentage point away from an all-time survey high reached in July.
31% of Americans say that home prices will rise, a drop of 3 percentage points from the previous month.
45% of Americans believe that mortgage rates will drop over the next 12 months.
69% of Americans say they are not concerned with losing their job, a drop of 1 percentage point from September.
4% of Americans say their household income is significantly higher than it was a year ago, a drop of 8 percentage points to the lowest percentage in more than three years.
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