Prospective home buyers and sellers are showing more enthusiasm about the housing market these days.
Fannie Mae’s June Home Purchase Sentiment Index (HPSI) increased 3.2 points in June to 72.6, rebounding from May’s 69.4 points. That’s an increase of 6.6 points year over year. At the same time, 19% of consumers indicated that it’s a good time to buy a home, up from May’s survey low of 14%. The percentage who say it is a bad time to buy decreased from 86% to 81%.
The share of consumers who say it's a good time to sell rose from 64% to 66%, while the percentage who say it's a bad time to sell decreased from 35% to 33%.
"Affordability concerns remain the primary driver of consumer housing sentiment, even as the topline findings from our monthly survey showed a modest uptick in optimism on both homebuying and home-selling conditions," Fannie Mae Vice President and Deputy Chief Economist Mark Palim commented. "If mortgage rates decline through the end of the year, as we currently forecast, we do think home sales activity will pick up, but progress on that front is likely to be slow due to the ongoing imbalance between supply and demand.”
More consumers overall — from 42% to 45% — said they expect home prices and mortgage rates to rise over the next year. The percentage who believe home prices will go down decreased from 18% to 17%, while the share who expect home prices to remain the same decreased from 40% to 36%.
The percentage of respondents who say mortgage rates will go down in the next 12 months decreased from 25% to 24%, while the percentage who expect mortgage rates to go up increased from 31% to 33%. The share who think mortgage rates will stay the same remained unchanged at 42%.
Additionally, more consumers (79%) expressed a sense of job security, up four percentage points from May.
“A significant majority of consumers continue to tell us that it's a 'bad time' to buy a home, and they're also telling us that they expect both home prices and mortgage rates to move higher over the next 12 months,” Palim pointed out. “Taken together, in our view, this leaves little upside to overall sentiment until meaningful progress is made on affordability – most likely in the form of either lower rates or improved supply. Of course, the flip side to a difficult purchase market is an advantageous sales market, and respondents also maintained their position that it's a generally good time to sell, pointing to high home prices as the primary reason."
