Fannie Mae today released its latest Home Purchase Sentiment Index (HPSI), which reflects consumers’ current views of housing market conditions—and the news is not good.
The HPSI decreased in December, falling 2.7 points to 83.5, indicating that the number of respondents who said it is a good time to buy a home has fallen. The HPSI is also down 2.3 points year-over-year.
“Consumer attitudes regarding whether it’s a good time to buy a home worsened significantly in the last month, as well as from a year ago, to a survey low,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.
The reasons cited by Duncan for the decline: Rising home prices that outpace income growth and softening confidence in the economy.
The good news: While fewer Americans say it is a good time to buy a home, the number of those who say it’s a good time to sell a home increased by one percentage point, to 36 percent—up 2 percentage points year-over-year.
The HPSI reflects consumers' current views and forward-looking expectations of housing market conditions. It’s based on the answers to six questions that solicit consumers' evaluations of housing market conditions and address topics that are related to their home purchase decisions. The questions ask consumers whether they think that it is a good or bad time to buy or to sell a house, what direction they expect home prices and mortgage interest rates to move, how concerned they are about losing their jobs and whether their incomes are higher than they were a year earlier.
To read more details on the latest HPSI, visit www.fanniemae.com/portal/research-insights/surveys/national-housing-survey.html.