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Fannie Mae Examines Homebuyer Sentiment

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Fannie Mae’s Home Purchase Sentiment Index (HPSI) fell 2.3 points in September to 91.5, falling from August’s survey high. 

Three of the six HPSI components saw month-over-month declines, including an 8-percentage point drop in the “Confident About Not Losing Job” component and a 7-percentage point drop in “Home Prices Will Go Up.”

These declines, though, were offset by increases in the “Good Time to Buy” and “Good Time to Sell,” at 3 and 4 percentage points, respectively. 

Doug Duncan, SVP and Chief Economist at Fannie Mae, said consumer sentiment remains relatively strong despite uncertainty over the economy and “individual financial circumstances” than the prior month. 

"Views about the direction of the economy held relatively steady, and the share of respondents who say it's a good time to buy or sell a home rose slightly. However, consumers who are pessimistic about current housing market conditions are more likely to cite unfavorable economic conditions than the prior month,” Duncan said. “Job confidence remains high but still well shy of its July reading. Despite some added uncertainty, the September HPSI indicates continued strength in housing market attitudes and is consistent with recent data on housing activity."

The HPSI reports the amount of Americans who say home prices will go up fell 7 percentage points to 29%, continuing declines that began in June. 

Fannie Mae found the amount of American who think mortgages will go up over the next year fell 6 percentage points to -23%. Additionally, the share of respondents who say their household income was higher than it was a year ago was unchanged at 21%. 

Black Knight’s September Mortgage Monitor Report says it now requires just 20.7% of the national median income to make monthly principal and interest payments on an averaged-price home. This is the second lowest payment-to-income in 20 months. 

The report says the average 30-year interest rate at 3.64% has been a key factor, and that home affordability hit a 32-month high in September. 

According to the report, the $1,122 in monthly P&I required to purchase an average-priced home is 10% lower than in November when interest rates closed in on 5%. Home prices, however, have risen more than 4% since that point.

About Author: Mike Albanese

Mike Albanese is a reporter for DS News and MReport. He is a University of Alabama graduate with a degree in journalism and a minor in communications. He has worked for publications—both print and online—covering numerous beats. A Connecticut native, Albanese currently resides in Lewisville.
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