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Fannie Mae's Home Purchase Sentiment Index increased by 5.2 points in March 2021 to 81.7. The company also reported that of the six components of the HPSI, four of those saw increases month-over-month including homebuying and home selling conditions, household income and home prices.
"The significant increase in the HPSI in March reflects consumer optimism toward the housing market and larger economy as vaccinations continue to roll out, a third round of stimulus checks was distributed, and the spring homebuying season began – perhaps with even more intensity this year, since 2020's spring homebuying season was limited by virus-related lockdowns," said Doug Duncan, Fannie Mae senior vice president and chief economist. "Home-selling sentiment experienced positive momentum across most consumer segments – nearly reaching pre-pandemic levels and generally indicative of a strong seller's market. Consumers once again cited high home prices and tight inventory as primary reasons why it's a good time to sell. Alternatively, while the net 'good time to buy' component increased month-over-month, it has not recovered to pre-pandemic levels, as the homebuying experience continues to prove difficult for many of the same reasons, namely high prices and a lack of supply."
The percentage of respondents that said it was a good time to purchase a home increased from 48% to 53%. The percentage of folks who said it is a bad time to purchase a home fell from 43% to 40%. Things are heating up on the seller side as 61% said it is a good time to sell a home, up from 55%. The percentage of folks who said it is a bad time to sell a home fell from 35% to 28%.
In terms of home price expectations, the number of folks who said they expect home prices to increase in the next 12 months increased from 47% to 50% and the number of folks who think home prices will decrease fell from 18% to 14%. As for mortgage rates expectations, just 6% believe that mortgage rates will decrease in the next 12 months while 54% believe mortgage rates will increase, up from 47% in the previous HPSI.
Click here to read more from Fannie Mae's HPSI.