Housing Market Confidence is Key

first_img Homeowners are confident in the housing market, according to Fannie Mae’s August Home Purchase Sentiment Index (HPSI), which reflects consumers’ views and expectations of housing market conditions. August reflected a 1.2 point increase to 88.0—just 0.3 points shy of June’s all time HPSI high.Fannie Mae uses the answers to six questions and polls 1,000 Americans to construct the HSPI—whether consumers 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.According to the report, the rise in confidence is credited to two out of the six components: being a good time to sell and mortgage rate expectations.“The net share who reported that now is a good time to sell a home rose 8 percentage points [to 36 percent] in August and is now up 21 percentage points compared to the same period last year,” the report stated.The net share of consumers that believe now is a good time to buy fell 5 percentage points to 18 percent, a new HPSI low for the second month in a row and 16 percentage points down from August 2016. This is due to high home prices—cited as the most important reason that the current market is a bad time to buy, but a good time to sell. Those who believe mortgage rates will go down over the next 12 months increased a net 4 percentage points to -45 percent.Doug Duncan, SVP and Chief Economist at Fannie Mae said we are seeing the opposite of what was observed in the early stages of economic expansion.“The net good time to sell share is now double the net good time to buy share, with record high percentages of consumers citing home prices as the primary reason for both perceptions,” Duncan said. “Such a sizable gap between selling and buying sentiment, if it persists, could weigh on the housing market through the rest of the year.” Housing Market: Confidence is Key September 7, 2017 496 Views in Daily Dose, Data, Featured, Newscenter_img Housing Confidence 2017-09-07 Brianna Gilpin Sharelast_img read more