Housing sentiment matches previous high
Americans are more confident about housing in June as sentiment levels returned to the previous high.
The Fannie Mae Home Purchase Sentiment index increased 2.1 percentage points to 88.3 in June, matching the all-time high set in February. The increase is due to four of the six HPSI components which increased during the month.
“The June HPSI reading matches the previous record set in February and reflects the trend toward a sellers’ market that respondents indicated last month,” said Doug Duncan, Fannie Mae senior vice president and chief economist. “Consumers are also growing more optimistic about their ability to get a mortgage, and lenders expect credit standards to ease further going forward, as shown in our Mortgage Lender Sentiment Survey.”
“While consumer optimism on this metric is as high as we’ve seen in the survey’s seven-year history, it’s worth noting that this record is relative to the fairly tight standards in place post-crisis when we started collecting National Housing Survey data,” Duncan said. “Nevertheless, in the face of very tight housing supply, easing credit standards may fail to have the desired effect and could have the unintended consequence of fueling further house price increases.”
The number of Americans who said now is a good time to sell hit a new record high for the second consecutive month as it increased seven percentage points to 39%. This outpaced the three percentage-point increase of those who said now is a good time to buy, which increased to 30%.
Once again, the gap between those saying now is a good time to sell and those saying it is a good time to buy widened once again as the housing scene continues to shift to a seller’s market.
The number of Americans who said mortgage rates will drop over the next 12 months increased three percentage points to -49%. However, the share of consumers who say home prices will go up increased by six percentage points to 46%.
But the index did see a decrease in two of its components. The share of Americans who are not concerned about losing their job dropped five percentage points to 66% in June, while those who said their household income is significantly higher than it was 12 months ago dropped one percentage point to 17% in June.