Fannie Mae recently released the July edition of their Home Purchase Sentiment Index (HPSI).
The HPSI takes information regarding consumers’ confidence in the real estate market from Fannie Mae’s National Housing Survey and condenses it into a single number. Therefore, the HPSI reflects consumers’ current views and forward-looking expectations of housing market conditions.
Great News! The index reached its highest level since Fannie Mae began their survey.
Five of the six HPSI components increased month over month, with an 8-percentage point increase in the net “Confidence About Not Losing Job” component driving the index higher. On a year-over-year basis, the forward-looking job confidence and “Mortgage Rates Will Go Down” components are up 16 and 24 percentage points, respectively.
Breaking it down, the report revealed the consumers’ confidence across the six components.
1. Is it a good time to buy a home?
- ⬆️Increased 3 percentage points to 26%.
This component is up 2 percentage points from the same time last year.
2. Is it a good time sell a home?
- ⬆️Increased 1 percentage point to 44%.
This component is up 3 percentage points from the same time last year.
3. Will home prices go up over the next 12 months?
- ⬇️Decreased 1 percentage points to 37%.
This component is down 2 percentage points from the same time last year.
4. Will mortgage rates go down over the next 12 months?
- ⬆️Increased 1 percentage points to -28%.
This component is up 24 percentage points from the same time last year.
5. Not concerned about losing their job over the next 12 months?
- ⬆️Increased 8 percentage points to 81%.
This component is up 16 percentage points from the same time last year.
6. Household income is significantly higher than it was 12 months ago?
- ⬆️Increased 1 percentage point to 21%.
This component is unchanged from the same time last year.
Consumers are feeling good about the real estate market. Since Americans are not worried about their jobs, see mortgage rates near an all-time low, and believe it is a good time to buy, the housing market will remain strong for the rest of the year. We see this is evident in the July 2019 home sales in Western Washington.