Fannie Mae’s Home Purchase Sentiment Index (HPSI) hit a new peak in July via a 2.2-point uptick to a reading of 93.7.
Five of the six HPSI components increased from June to July, with an eight-percentage-point spike in the net “Confidence About Not Losing Job” component fueling the upward activity. driving the index higher. The only component to record a decline involved the net share of those who say home prices will go up over the next 12 months, and that was only a one-percentage-point dip. Compared to one year earlier, the forward-looking job confidence and “Mortgage Rates Will Go Down” components recorded increases of 16 and 24 percentage points, respectively.
“Consumer job confidence and favorable mortgage rate expectations lifted the HPSI to a new survey high in July, despite ongoing housing supply and affordability challenges,” said Doug Duncan, senior vice president and chief economist. “Consumers appear to have shaken off a winter slump in sentiment amid strong income gains. Therefore, sentiment is positioned to take advantage of any supply that comes to market, particularly in the affordable category. However, recent financial market events following when the survey data were collected could weigh on consumer views looking ahead.”