The Fannie Mae Home Purchase Sentiment Index (HPSI) fell in July for the second consecutive month, dropping 4.2 points to 86.5, after reaching survey highs in April and May.
Four out of six HPSI components declined.
The net share of survey respondents who said now is a good time to buy a home fell 4 percentage points, and the net share who said it is a good time to sell a home fell 6 percentage points. Additionally, the net share who said that home prices will go up in the next 12 months decreased 7 percentage points.
More Americans also expressed a decreased sense of job security, with the net share who said they are not concerned about losing their job falling 11 percentage points in July.
“Home purchase sentiment seems to have reached a plateau, with potential home sellers likely struggling to find a home to buy amid slow supply growth, expectations for rising mortgage rates, and significant home price increases,” says Doug Duncan, senior vice president and chief economist at Fannie Mae.
“Survey respondents cite ‘high home prices’ as the top reason why it is both a good time to sell a home and bad time to buy a home,” he adds. “This suggests a contributing factor to the low supply of existing homes for sale is that current owners are reluctant to trade up in a rising price market. Additionally, the shares of consumers citing favorable mortgage rates as a reason why it’s a good time to buy or sell a home both dropped to fresh survey lows.”
Home Purchase Sentiment Index snapshot
Fannie Mae’s 2018 Home Purchase Sentiment Index (HPSI) decreased in July by 4.2 points to 86.5. The HPSI is down 0.3 points compared with the same time last year.
The net share of Americans who say it’s a good time to buy a home fell 4 percentage points from last month to 24 percent.
The net share of those who say it’s a good time to sell fell 6 percentage points from last month’s survey high to 41 percent.
The net share of those who say home prices will go up fell 7 percentage points to 39 percent, falling under 40 percent for the first time since December 2016.
The net share of Americans who say mortgage rates will go down over the next 12 months rose 1 percentage point to 52 percent.
The net share of Americans who say they are not concerned about losing their job fell 11 percentage points from last month to 65 percent.
The net share of those who say their household income is significantly higher than it was 12 months ago rose 2 percentage points to 21 percent, matching the survey high from May 2018.
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