After moving along a nearly flat track for several years, consumer sentiment regarding whether "now" is a good time to buy a home started to rise and fall like the tides in late 2016. April saw increasing positives sentiment; the net share of those saying it was a good time gain 5 percentage points to 35 percent after rising and then falling by ten points in February and March.
The results of Fannie Mae's National Housing Survey (NHS) also included a shift in the "good time to sell" sentiment, which has always lagged well behind the "buy" responses. Its net percentage began to increase in November and hit a survey high of 31 percent in March but it dropped five points in April.
These two questions are among the six from the survey that make up Fannie Mae's Home Purchase Sentiment Index (HPSI) which rose 2.2 percentage points in April to 86.7. The index was rebounding from a March dip and gained 3.0 points over its level in April 2016. The "good time to sell" component was the only one of the six to lose ground during the month.
Americans expect home prices will continue to appreciate; the net share was up by 1 point to 45 percent. Those who think mortgage rates will go down from their current levels over the next year rose 3 points off last month's survey low to a net of -57 percent.
The survey's questions about personal finances also received more positive responses than in March. Consumers are more confident about their job security with the net of those who are not worried about keeping their jobs over the next year jumping 7 percentage points to 77 percent, erasing most of last month's decline. Those who report receiver higher household income than 12 months ago increased by 2 points.
"The Home Purchase Sentiment Index returned to its longer-term trend line after reclaiming ground lost last month. This is aligned with our market forecast of about 3 percent sales growth in 2017," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "Historically strong inflation-adjusted house price gains are tempering consumer sentiment, whereas consumer optimism regarding the ease of getting a mortgage reached a survey high. On balance, housing continues on a gradual growth track."
The Home Purchase Sentiment Index (HPSI) distills information about consumers' home purchase sentiment from the NHS into a single number that reflects current views and forward-looking expectations of housing market conditions. The NHS is conducted monthly by telephone among 1,000 consumers, both homeowners and renters. Respondents are asked more than 100 questions used to track attitudinal shifts, six of which are used to construct the HPSI. The April survey was conducted between April 1 and April 22, 2017 with most respondents contacted during the first two weeks of that period.
