The housing market continues its strong push through 2017. Fannie Mae’s Home Purchase Sentiment Index (HPSI) increased by 0.3 points to 88.3 in September, matching the all-time high set in June.
The increase basically boils down to improved performance in three out of six of the HPSI components.
- The good time to buy component increased the most, up 10 percentage points compared to August.
- The renters in the survey were particularly optimistic in September.
- Respondents who feel that it is a good time to sell also went up in September by two percentage points. The overall number is now 23 percentage points higher than this time last year.
- Respondents who think that home prices will go up over the next year fell by eight points.
- Also, more Americans are feeling secure about their jobs. The number of people who said they are not worried at all about losing their job increased by one percent.
- However, fewer people feel they are increasing their income significantly. The number of consumers who believe their income is significantly higher than it was the same time last year decreased by one percentage point.
“The biggest driver for the increase in the HPSI is the rebound in the good time to buy sentiment, which outweighed the largest drag—a sizable reduction in the net share of consumers expecting home prices to rise over the next year,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.” With that said, Mr. Duncan also believes that the effects of the devastating hurricanes will have a strong impact on home sales in the coming months.
Highlights of the Survey
Here are some of the specifics from Fannie Mae’s 2017 Home Purchase Sentiment Index (HPSI):
- The number of Americans saying that it is a good time to buy rose by 10 percentage points to 28%.
- Those saying that it’s a good time to sell rose by two percentage points to bring the total up to 38%. The current all-time high is 39%.
- Fewer people think home prices will go up. This number dropped by eight percentage points in September.
- People who think mortgage rates will decrease over the next year fell by two percentage points.
- The number of Americans who are not concerned about losing their job rose by one percentage point.
- The number of Americans who feel they’re making significantly more money than at the same time last year fell by one percentage point.
About the Home Purchase Sentiment Index (HPSI)
The Home Purchase Sentiment Index (HPSI) is a single number that represents consumers’ home purchase sentiment as revealed by Fannie Mae’s National Housing Survey (NHS). The goal of the HPSI is to give an accurate view of consumer perception of the housing market moving forward.
The HPSI is constructed from answers to six NHS questions that ask consumers whether:
- They think it is a good or bad time to buy or to sell a home.
- What direction they expect home prices and mortgage interest rates to move.
- How concerned they are about losing their job, and whether their incomes are higher than a year earlier.
About the National Housing Survey (NHS)
The NHS survey polls 1,000 consumers via live interviews about owning and renting a home, home and rental price changes, homeownership distress, the economy, household finances, and overall consumer confidence. In total, there are over 100 questions. Fannie Mae runs this survey both monthly and quarterly to keep information as up to date as possible.
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