Overall housing sentiment recovered in April as consumers showed more confidence in buying a home now and reversed some decreases reported in March. Fannie Mae’s April 2017 Home Purchase Sentiment Index® racked up 86.7, up by 2.2 percentage points from last March and up by 3 percentage points from a year ago.
The HPSI® tracks the shift in consumers’ attitudes, thoughts, and expectations toward the housing market, framed by six questions from the National Housing Survey®. Let’s look at the six questions that form the basis for the April housing sentiment with their corresponding results, as well as other key indicators.
Is Now a Good Time to Buy or Sell?
The first two questions of the survey ask the respondents whether now is a good time to (1) buy a home and (2) sell a home.
For the month of April, more respondents who thought that now is a good time buy a home rose to 35%, an increase of 5 percentage points since last month and last year, respectively.
The opposite can be said with selling a home. The net share of respondents who believed now is a good time to sell fell 5 percentage points to 26%. Notably, this is the only question in the survey that went down and reversed the all-time record high of 31% recorded in March.
Of Home Prices Going Up and Mortgage Rates Going Down
With the next 12 months as time frame, respondents were asked whether they believe that (3) home prices will go up and (4) mortgage rates will go down.
A higher number of consumers answered that home prices will likely rise as shown by a percentage point increase to 45% in April. The share of those who said that mortgage rates will go down also rose by 3 percentage points, from (60%) in March to (57%) in April.
Losing a Job and Household Income
The last two questions of the survey center on (5) concerns about losing a job in the next 12 months and (6) one’s current monthly household income compared to a year ago.
More Americans are not concerned about losing a job with an increase of 7 percentage points to 77% in April from 70% in March.
The share of consumers who reported a significantly higher household income also increased to 13% in April, up by 2 percentage points from last month.
Other Housing Sentiment-Related Indicators
In addition to the main components of the housing sentiment, the following trends may more or less serve to supplement the overall results in April:
- Americans expect an increase of 4% in rental prices and 3.0% in home prices in the next 12 months.
- The number of Americans who expect home rental prices to go up fell to 52%, while the share of those who believe that home rental prices will go down held steady at 3%.
- The share of respondents who said they would buy a home if they were to move rose to 67% while those who said they would rent fell to 28%.
- The number of Americans who think that getting a mortgage is easy increased to 57% — a new survey high — while the share of those who think it would be difficult fell to 39% — a survey low.
- Fewer Americans think that personal financial situation will get better, falling to 47% while the number of consumers who think their finances would remain the same rose to 40%. Ten percent of respondents held on to the belief that their finances will get worse over the next 12 months.
- The number of Americans who say that the economy is on the right track fell to 46%. Similarly, those who think that the economy is on the wrong track also fell to 39%.
A national poll with a representative sample of 1,003 consumers (who are key financial decision makers in their households and aged 18 and older), the latest NHS® contains insights collected between April 1 and 22, 2017.
Fannie Mae Senior Vice President and Chief Economist Doug Duncan said in its news release that housing continues to be on a gradual growth track, with strong house price gains balancing consumer sentiment.
Justin McHood is a managing partner at Suited Connector and has been recognized by national media outlets as a financial expert for more than a decade.
