Fannie Mae reports housing market confidence drop First drop in three months
Fannie Mae reports housing market confidence drop
First drop in three months
Following three months of increases, Fannie Mae’s Home Purchase Sentiment Index (HPSI), a composite index designed to track the housing market and consumer confidence to sell or buy a home, fell 1.7 points in November to 80. Year-over-year, the HPSI is down 11.5 points.
Senior Vice President and Chief Economist Doug Duncan points to consumer wariness around COVID-19 as reason for the sudden decline in housing market confidence.
“This follows the HPSI’s recovery of slightly more than half of the loss experienced during the first few months of the pandemic,” he said. “Purchase confidence has recovered more for homeowners than for renters, in part because homeowners have been less likely than renters to have had their jobs and finances impacted by the pandemic.”
Duncan added that the gap between homeowner and renter subgroups hit a survey-high in August, and remains “elevated and well-above the survey average” in November.
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The percentage of HPSI respondents who said it was a good time to buy a home fell 3% in November, from 60% to 57%. Those who said it was a good time to sell a home remained the same at 59%. The net share of Americans who say home prices will increase jumped 8 percentage points month-over-month.
As for mortgage rates, the net share of residents who believe rates will go down over the next 12 months decreased 14% month-over-month.
Concern for the job market has been understandably high in 2020; in October, the net share of residents who said they were concerned about losing their job was at 21%. That number increased to 24% in November.
The share of Americans who say the economy is on the right track actually rose 3 points to 42% from October. And, the net share of Americans who say their household income is “significantly higher” than it was 12 months ago increased 3 percentage points month-over-month according to the report.
Forty percent of HPSI respondents said they expect their financial situation to improve, and 41% think their financial situation will stay the same. Twenty-four percent of respondents said their change in household income is “significantly higher” in October than the past 12 months.
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