In October, the measure of home purchase sentiment decreased slightly, per a report on the Home Purchase Sentiment Index (HPSI) from Fannie Mae. There are many reasons why the HPSI may have gone down. Overall, the HPSI decreased 3.1 points, falling from the all-time high it reached last month to 85.2.
What is the HPSI?
According to Fannie Mae, the Home Purchase Sentiment Index (HPSI) “is a composite index designed to track consumers’ housing-related attitudes, intentions, and perceptions, using six questions from the National Housing Survey® (NHS).
The purpose is to reflect consumers’ current views and expectations for the near future about the housing market. The goal is to inform housing analysis and decision making in multiple markets. There are six questions on the NHS – all questions are related to home purchase decisions or something that could impact home purchase decisions.
The questions asked of consumers include:
- Whether they think it is a good time to buy or sell a home.
- What they expect home prices and interest rates to do.
- How secure they feel about their job.
- Whether their incomes are higher this year than last year.
Fannie Mae October 2017 Report
Fannie Mae’s October report shows decreases in four out of the six HPSI components. They were:
- The number of responders who thought it was a good time to sell a home decreased by 8%. (Note that it still remains up 11% compared to October 2016.) The number of responders who thought it was a good time to buy a home decreased by 6%.
- Americans felt a decreased amount of job security – those who said they were NOT concerned about losing their job fell by 5%.
- Those who reported their income as significantly higher than it was a year ago fell by 1%.
- The two areas where there was not a decrease were:
- Americans who believed that mortgage rates will go down increased by 1%.
- The amount of people who believed that home prices would rise in the next year held steady.
Overall, the decrease in the HPSI reflects the public’s views on whether it is a good time to buy or sell a home. Remember, though, that a decrease in the HPSI is expected this time of the year, since fewer people are buying or selling homes during the holiday season. It is important to note that the HPSI is up 3.5 points over this same time last year.
“The modest decrease in October’s Home Purchase Sentiment Index is driven in large part by decreases in favorable views of the current home-buying and home-selling climates, a shift we expect at this time of year moving out of the summer home-buying season,” Doug Duncan said, senior vice president and chief economist at Fannie Mae. “Indicators of broader economic and personal financial sentiment remain relatively steady. Overall, these results are consistent with our view that the housing market will continue its slow, upward grind through 2018.”
Marimark Mortgage is based in Tampa, Florida, and serves the mortgage needs of homebuyers and homeowners in all of Florida, Virginia, and Pennsylvania.
We specialize in conventional home mortgages, FHA, VA and USDA mortgage options, refinance loans, and reverse mortgages. We’ve worked extensively with cash-out refinancing, and help clients with HARP refinancing to lower their monthly mortgage payments.