Fannie Mae’s Home Purchase Sentiment Index (HPSI) inched up by a scant 0.1-point in August to 93.8, but it was enough to push the survey to a new high.
The uptick came while five of the six HPSI components remained flat or declined from July. The fuel to the new high came in the sixth component, “Mortgage Rates Will Go Down,” which recorded an 11 percent spike.
“Growing expectations that mortgage rates will remain flat or decline are reflected in the HPSI’s latest reading, which is now at a survey high even though other indicators of economic and housing market sentiment are flat to negative,” said Doug Duncan, Fannie Mae’s senior vice president and chief economist. “Unfortunately, much of the lower interest rate environment can be attributed to global economic uncertainties, which appear to have dampened consumer sentiment regarding the direction of the economy. We do expect housing market activity to remain relatively stable, and the favorable rate environment should continue supporting increased refinance activity.”