After nearly reaching a survey high in May, the Fannie Mae Home Purchase Sentiment Index (HPSI) recorded a mild 0.5-point decline in June to 91.5.
Only one of the survey’s six components saw an increase last month–an eight-percentage point rise in the net “Mortgage Rates Will Go Down” component–with the others mostly flat or negative, most notably a four percentage point drop in “Good Time to Buy.” Nonetheless, the HPSI is up 0.8 points compared to June 2018.
“Growing expectations that mortgage rates will remain steady suggest improved stability for housing affordability and helped keep the HPSI relatively flat this month, despite modest declines in other components,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Regional variations in housing optimism appear to be tied to a divergence in housing affordability; for example, home purchase sentiment is higher in the Midwest and South than in the West and, to a lesser extent, the Northeast, where the lack of entry-level inventory and the resultant strong price appreciation has had a more profound impact on affordability. With fewer consumers expecting rates to jump back up–thereby creating less urgency to buy now–we expect housing market activity to remain stable.”