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Fannie Mae: Potential Homeowners Becoming Increasingly Concerned With Market

The Fannie Mae [1] Home Purchase Sentiment Index [2] (HPSI) decreased 2.0 points in June to 62.8, its second-lowest reading in a decade, according to their latest report. Surveyed consumers continue to express pessimism about homebuying conditions, with only 17% (down from 20%) of respondents reporting it’s a good time to buy a home, while the percentage of consumers who believe it’s a “Good Time to Sell” fell from 68% to 67% this month. 

As of July, the HPSI has declined every month since March and is now down 13 points since the beginning of the year. The last time the index rose 

“The HPSI has declined steadily for much of the year, as higher mortgage rates continue to take a toll on housing affordability,” said Doug Duncan [3], Fannie Mae SVP and Chief Economist. “Unfavorable mortgage rates have been increasingly cited by consumers as a top reason behind the growing perception that it’s a bad time to buy, as well as sell, a home. Additionally, consumers appear to be indicating that selling conditions are softening, as the ‘Good Time to Sell’ component has declined meaningfully over the past two months, and, on net, fewer consumers expect home prices to go up.” 

“With home price growth slowing, and projected to slow further, we believe consumer reaction to current housing conditions is likely to be increasingly mixed: Some homeowners may opt to list their homes sooner to take advantage of perceived high prices, while some potential homebuyers may choose to postpone their purchase decision believing that home prices may drop,” Duncan continued. “Overall, this month’s HPSI results appear to confirm our forecast for moderating home sales over the coming year.” 

Additional findings on the six major components of the HPSI include: 

Click here [4] to view the HPSI in its entirety.