More consumers are beginning to believe that now is a bad time to buy a home, according to Fannie Mae’s latest Home Purchase Sentiment Index (HPSI). Only 28% of respondents believe now is a good time to buy, while 66% disagree — more than the 63% who disagreed last month.
The home-selling conditions component remained mostly flat, with a strong majority of consumers maintaining that it’s a good time to sell. Year over year, the full index is down 6.5 points.
“The HPSI declined slightly this month but remains within the general bounds we’ve seen since the end of last year,” said Doug Duncan, Fannie Mae senior vice president and chief economist. “The survey’s story is also largely unchanged: Consumers feel it’s a bad time to buy a home but a good time to sell – and they continue to cite high home prices as the primary reason. Across all consumer segments, renters and younger consumers were slightly more likely to indicate it’s a bad time to buy, perhaps a reflection of their generally lower incomes and their observation that the availability of affordable homes is lacking.”
Duncan said Fannie is also seeing a softening in consumers’ expectations that home prices will continue to increase. “However, in our view, other housing market fundamentals remain supportive of further home price appreciation – including low levels of inventory and low interest rates,” he said.
Fannie Mae’s Home Purchase Sentiment Index (HPSI) decreased in September by 1.2 points to 74.5. The HPSI is down 6.5 points compared to the same time last year.
The percentage of respondents who say they are not concerned about losing their job in the next 12 months decreased from 82% to 81%, while the percentage who say they are concerned increased from 15% to 16%. As a result, the net share of Americans who say they are not concerned about losing their job decreased 2 percentage points month over month.
The percentage of respondents who say their household income is significantly higher than it was 12 months ago increased from 26% to 27%, while the percentage who say their household income is significantly lower increased from 12% to 13%. The percentage who say their household income is about the same decreased from 59% to 57%.