Americans again expect home prices to start rising
Consumers became more optimistic about the housing market immediately following the election, according to Fannie Mae’s Home Purchase Sentiment Index. What’s more, the share of Americans who expect home prices will only continue to increase grew four percentage points to 35%, reversing the three-month downward trend.
The HPSI decreased in November for the fourth consecutive month, sliding down 0.5 points to 81.2. Four of the six components of the HPSI decreased. The election created a great divide in confidence levels from before and after election day.
“The November Home Purchase Sentiment Index outcome is difficult to interpret as the data collection period occurred across the Presidential election timeline,” said Doug Duncan, Fannie Mae senior vice president and chief economist. “The results are fairly evenly split between responses collected before and after the election, and there is evidence of an increase in consumer optimism in the immediate aftermath of the election.”
Those who said now is a good time to buy a home decreased by one percentage point to 30%, while those who said now is a good time to sell fell by six percentage points to 13% in November. Those who said now is a bad time to sell even rose two percentage points to 38%.
“However, if mortgage rates continue their recent rise, we may see a dampening in home purchase attitudes,” Duncan said. “There are clear predecessors for rapid market changes that ultimately dissipated, which urges caution in the interpretation of stability in short-term rate changes.”
Those who say mortgage rates will go down over the next twelve months decreased by six percentage points to -51%, while those who say they are not concerned about losing their job fell five percentage points to 64%.
Americans who answered their household income is significantly higher than it was 12 months ago rose 11 percentage points to 15%, reversing the decrease seen in October.
Fannie Mae forecasts only modest growth in the next 12 months.