June 07, 2019Americans’ Confidence in Housing Nears Survey High, Despite Moderating Optimism About Wage Growth and Job Security
Uptick in Sentiment Driven by Jump in "Good Time to Buy" Component
WASHINGTON, DC – The Fannie Mae (FNMA/OTCQB) Home Purchase Sentiment Index® (HPSI) increased 3.7 points in May to 92.0, just shy of the survey high set last May. A 13-percentage point increase in the “Good Time to Buy” component drove the index higher. The net share of respondents expecting home prices to go up and mortgage rates to go down over the next 12 months also increased by 5 and 3 percentage points, respectively.
“Another sharp rebound in the ‘Good Time to Buy’ component lifted the HPSI nearer its survey high set during last year’s homebuying season, though several uncertainties remain,” said Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae. “While consumers’ more favorable mortgage rate outlook suggests continued support for housing affordability, potential homebuyers still face supply constraints. Additionally, while the survey recently resumed its upward trend, consumers’ sense of income growth and job security have moved lower from the highs established earlier in the year, which, if sustained, could weigh on the housing market in the second half of the year.”
HOME PURCHASE SENTIMENT INDEX – COMPONENT HIGHLIGHTS
Fannie Mae’s 2019 Home Purchase Sentiment Index (HPSI) increased in May by 3.7 points to 92.0. The HPSI is down 0.3 points compared to the same time last year.
- The net share of Americans who say it is a good time to buy a home increased 13 percentage points to 27%. This component is down 1 percentage point from the same time last year.
- The net share of those who say it is a good time to sell a home remained unchanged at 43%. This component is down 3 percentage points from the same time last year.
- The net share of those who say home prices will go up over the next 12 months increased 5 percentage points to 41%. This component is down 8 percentage points from the same time last year.
- The net share of Americans who say mortgage rates will go down over the next 12 months increased 3 percentage points to -37%. This component is up 12 percentage points from the same time last year.
- The net share of Americans who say they are not concerned about losing their job over the next 12 months increased 2 percentage points to 76%. This component is down 2 percentage points from the same time last year.
- The net share of those who say their household income is significantly higher than it was 12 months ago decreased 1 percentage point to 21%. This component is unchanged from the same time last year.
ABOUT FANNIE MAE’S HOME PURCHASE SENTIMENT INDEX
The Home Purchase Sentiment Index (HPSI) distills information about consumers’ home purchase sentiment from Fannie Mae’s National Housing Survey® (NHS) into a single number. The HPSI reflects consumers’ current views and forward-looking expectations of housing market conditions and complements existing data sources to inform housing-related analysis and decision making. The HPSI is constructed from answers to six NHS questions that solicit consumers’ evaluations of housing market conditions and address topics that are related to their home purchase decisions. The questions ask consumers whether they think that it is a good or bad time to buy or to sell a house, what direction they expect home prices and mortgage interest rates to move, how concerned they are about losing their jobs, and whether their incomes are higher than they were a year earlier.
ABOUT FANNIE MAE’S NATIONAL HOUSING SURVEY
The most detailed consumer attitudinal survey of its kind, Fannie Mae’s National Housing Survey (NHS) polled approximately 1,000 Americans via live telephone interview to assess their attitudes toward owning and renting a home, home and rental price changes, homeownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts, six of which are used to construct the HPSI (findings are compared with the same survey conducted monthly beginning June 2010). As cell phones have become common and many households no longer have landline phones, the NHS contacts 70 percent of respondents via their cell phones (as of January 2018). For more information, please see the Technical Notes. Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to stabilize the housing market in the near-term, and provide support in the future. The May 2019 National Housing Survey was conducted between May 1, 2019 and May 22, 2019. Most of the data collection occurred during the first two weeks of this period. Interviews were conducted by PSB, in coordination with Fannie Mae.
DETAILED HPSI & NHS FINDINGS
For detailed findings from the May 2019 Home Purchase Sentiment Index and National Housing Survey, as well as a brief HPSI overview and detailed white paper, technical notes on the NHS methodology, and questions asked of respondents associated with each monthly indicator, please visit the Surveys page on fanniemae.com. Also available on the site are in-depth special topic studies, which provide a detailed assessment of combined data results from three monthly studies of NHS results.
To receive e-mail updates with other housing market research from Fannie Mae's Economic & Strategic Research Group, please click here.
Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of Americans. We partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing finance to make the home buying process easier, while reducing costs and risk. To learn more, visit fanniemae.com and follow us on twitter.com/fanniemae.