The Fannie Mae Home Purchase Sentiment Index® (HPSI) decreased 4.1 points in October to 56.7, its eighth consecutive monthly decline and lowest reading since the inception of the index in 2011. Year over year, the full index is down 18.8 points.
The HPSI found that the percentage of respondents who say it is a good time to buy a home decreased from 19% to 16%, while the percentage who say it is a bad time to buy increased from 75% to 80%. As a result, the net share of those who say it is a good time to buy decreased 8 percentage points month over month.
Additionally, the report stated that the percentage of respondents who say it is a good time to sell a home decreased from 59% to 51%, while the percentage who say it’s a bad time to sell increased from 33% to 42%. The net share of those who say it is a good time to sell decreased 17 percentage points month over month.
Key highlights:
- Those who feel home prices will go up in the next 12 months decreased from 32% to 30%. The net share of those who say home prices will go up decreased 4 percentage points month over month.
- Those who feel prices will go up increased from 35% to 37%.Those who think home prices will stay the same decreased from 28% to 26%.
- 6% feel mortgage rates will go down in the next 12 months, a decrease from 9% last month. The net share of those who say mortgage rates will go down over the next 12 months decreased 4 percentage points MoM.
- 65% feel mortgage rates will go up, an increase from 64% last month. Those who think mortgage rates will stay the same increased from 20% to 24%.
- The percentage of those who say they are not concerned about losing their job in the next 12 months increased from 78% to 85%. The net share of those who are not concerned about their job increased 13 percentage points MoM.
- Meanwhile, the percentage who say they are concerned decreased from 21% to 15%.
- 26% feel their household income is significantly higher than it was 12 months ago, an increase from 25% last month. The net share of those who say their household income is significantly higher decreased 5 percentage points MoM
- 15% feel their household income is significantly lower, an increase from 11% last month. The percentage who say their household income is about the same decreased from 61% to 60%.
Major takeaway:
“The HPSI reached an all-time survey low this month, in line with expectations that the housing market will continue to cool in the months ahead,” said Doug Duncan, Fannie Mae senior vice president and chief economist. “Consumers are increasingly pessimistic about both homebuying and home-selling conditions. Amid persistently high home prices and unfavorable mortgage rates, the ‘bad time to buy’ component increased to a new survey high this month, while the ‘good time to sell’ component continued its downward trend. Consumers also remain concerned about the movement of home prices–expectations that prices will decrease reached a new survey high, particularly among homeowners–offering further support to our forecast of home price declines in 2023. As continued affordability constraints reduce homebuyer demand, and homeowners become reluctant to sell at potentially reduced prices, we expect home sales to slow even further in the coming months, consistent with our forecast.”
For the full report, click here.
