Consumer Housing Sentiment Mixed
In the February Fannie Mae Home Purchase Sentiment Index (HPSI), the results were not exactly optimistic. In their report, (which measures consumer sentiment, not expert opinion), housing sentiment fell for the first time since 2023, year over year. The HPSI fell 1.8 points in February to 71.6. The reasons are driven by consumers’ increased pessimism that mortgage rates will fall next year. Interestingly, and a bit contradictory, the share of consumers who say, “it’s a good time to buy a home” rose slightly last month compared to the prior month. But the share of respondents who said “it’s a good time to sell a home” dipped.
Unfortunately, consumers showed a decline in their personal financial situation, including both their personal income and job security. Compared to a year ago this HPSI measure dropped by 1.2 points. But it’s important to remember that this survey was concluded before the 30-year-fixed mortgage rate began to fall well below seven percent (they had been above 7% for a few months.) At the time I’m writing this, the 30-fixed rate is 6.73%.
The optimism, though, is in the fact that the number of respondents (as alluded to above) that say it’s a good time to buy a home rose to 24% compared to 22% a year earlier. And those who say it’s a bad time to buy decreased from 78% to 76% currently.
The percentage of those who thought it was a good time to sell decreased from 63% a year ago to 62% today. The percentage who says it’s a bad time to buy increased from 36% to 37%.
Interestingly, the percentage of people who think home prices will rise in the next twelve months decreased from 43% a year ago to 41% today. The percentage of people who think home prices will go down increased from 22% to 23%.
On a sobering note, the percentage of respondents who say mortgage rates will go down in the next 12 months decreased from 35% to 30%, while the percentage who expect mortgage rates to go up increased from 32% to 33%. The percentage who thinks rates will stay the same increased from 33% to 36%.
The percentage of respondents who state they are not concerned with losing their job in the next twelve months decreased from 78% to 77%, while the percentage who say they are concerned increased from 22% to 23%.
Lastly, in a mixed signal, the percentage of respondents who say their income is well above what it was a year ago increased from 17% to 18%, while the percentage who say their household income is significantly lower increased from 9% to 11%.
Note: The Fannie Mae’s National Housing Survey is a monthly attitudinal survey, launched in 2010, which polls a representative sample of adult household financial decision makers in the United States, to assess their attitudes toward owning and renting a home, purchase and rental prices, household finances, and overall confidence in the economy.
As you, dear reader, probably saw, the numbers didn’t move much in the past year. What can I say? Sometimes the housing market (like all markets) is bullish, sometimes bearish, and sometimes, well, static.