Fannie Mae’s Home Purchase Sentiment Index (HPSI) gives a pretty clear picture of the general public’s feelings and concerns on certain market trends, such as mortgage rate expectations, whether or not people feel it’s a good or bad time to buy or sell a home, income, job concerns and home price expectations.
In the month of July, the overall sentiment dropped to 86.8—a decrease of 1.5 percentage points. June was the index’s highest amount. This overall decrease is due to drops in half of the HPSI components: the net amount of people who felt this was a good time to buy a home (7 percentage points), the number of people who felt like this is a good time to sell a home fell (11 percentage points); and respondents income being significantly higher than it was 12 months ago also fell slightly (1 percentage point). People did, however, feel a greater sense of job security, which was measured at a difference of 9 percent.
July was a month for records, as people who though it was a bad time to buy a home reached a new survey high. As follows, people who that it was a good time to buy a home reached a new survey low. Drop in both selling and buying sentiment were the two largest reasons for the overall drop in the HPSI.
“It’s clear that high home prices are a growing challenge helping to send buying sentiment to a record low,” said Doug Duncan, SVP and Chief Economist at Fannie Mae. “However, we find the notable decline in selling sentiment surprising. If it persists, this month’s decrease in optimism regarding the direction of the economy, which appears to coincide with rising uncertainty regarding the outlook for pro-growth legislation this year, could weigh on overall housing sentiment in the second half of the year.”