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Home | Daily Dose | Homebuyers Reflect Uncertainty Toward the Market
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Homebuyers Reflect Uncertainty Toward the Market

Rates BHU.S. homebuyers were overall more pessimistic about the market in October, according to the latest Fannie Mae Home Purchase Sentiment Index (HPSI). The index last month dropped another 1.1 points to 81‒‒the third decrease in as many months‒‒and four of the six components that comprise the HPSI fell during October as well.

“The HPSI fell in October for the third straight month from its record high in July, reaching the lowest level since March,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Recent erosion in sentiment likely reflects, in part, enhanced uncertainty facing consumers today.”

According to the index, the share of consumers reporting significantly higher income over the past year experienced the largest drop, decreasing 8 percent. Consumers expecting home prices to go up in the next year fell 3 percent, and those who expect mortgage rates to drop and those who are confident about not losing their job each dropped 1 percent last month.

“Since July, more consumers, on net, have steadily expected mortgage rates to rise and home price appreciation to moderate,” Duncan said. “Furthermore, consumers’ perception of their income over the past year deteriorated sharply in October to the worst showing since early 2013, weighing on the index.”

Duncan added that this component of the HPSI is “volatile from month to month,” and that the trend in wage gains from the October jobs report, if sustained, could “foreshadow an improving view in the near future.”

Fannie reported that the net share of Americans who say they are not concerned with losing their job fell 1 percentage point to 69 percent.

At the same time, more consumers said they believe now is a good time to buy or to sell a home.  Those who believe it’s a good time to buy are up four points on the index, to 19 percent, while those who think it’s a good time to sell are up two, to 31 percent.

Fannie Mae’s 2016 Home Purchase Sentiment Index (HPSI) decreased again in October by 1.1 percentage points to 81.7. Overall, the HPSI is down 1.5 points since this time last year. Those who say their household income is significantly higher than it was 12 months ago fell 8 percent points (to 4 percent overall), the lowest it has been in more than three years.

About Author: Scott Morgan

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Scott Morgan is a multi-award-winning journalist and editor based out of Texas. During his 11 years as a newspaper journalist, he wrote more than 4,000 published pieces. He's been recognized for his work since 2001, and his creative writing continues to win acclaim from readers and fellow writers alike. He is also a creative writing teacher and the author of several books, from short fiction to written works about writing.

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