Fannie Mae's Home Purchase Sentiment Index (HPSI) rose to 83.8 for the month of September following a two-month decline and up 3 points from August.
The index showed that four of the six components questioned posted net positive gains. The Good Time to Sell component increased 13 points in September compared to the prior month, with 52 percent indicating that it was a good time to sell, up five percentage points from last month.
“The HPSI returned near its record high this month, driven primarily by improvement in attitudes about selling a home and strengthening home prices,” said Doug Duncan, SVP and chief economist at Fannie Mae.
The Good Time to Buy component increased three points as rising rental prices may be pushing more consumers toward purchasing a home. Of those surveyed, 64 percent indicated that it was a good time to buy a home in September, up one percentage point from August.
“With consumers’ expectations for rental price increases continuing to outpace their expectations for home price growth, many consumers may view homeownership as a more attractive option," Duncan said. "This should have positive implications for the housing market, which remains well below historical norms in relation to housing starts."
Fannie Mae also found 45 percent of respondents believe that home prices will increase over the next year, while 9 percent indicated that prices will lower. Fifty-five percent of respondents noted that mortgage interest rates when go up in the next 12 months, while 5 percent said they would go down.
"Although net home price and mortgage rate expectations dipped in September, consumers' confidence in their employment and financial situations climbed 2 and 3 points, respectively, further suggesting a possible firmer footing for housing," the report said.
When questioned about job security, 84 percent shared that they are not concerned with losing their job, while 15 percent are. Approximately 28 percent of those questioned reported higher income than last year and 13 percent reported lower income.
"We noted last week that, despite a relatively dismal jobs report, the addition of 8,000 construction jobs, the biggest gain in four months, may be a sign of grudging progress for the supply side of housing," Duncan said. "The September HPSI data, combined with the recent increase in construction jobs, are consistent with our expectation for a continued upward grind in housing.”
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