Fannie Mae: Housing Sentiment Inches Higher, Driven by Mortgage Rate Outlook
MBA NewsLink Staff
Fannie Mae, Washington, D.C., said its Home Purchase Sentiment Index increased by 0.1 points in August to 93.8, a new survey high.
The report said despite five of the six index components remaining flat or decreasing month over month, an increase of 11 percentage points in the net "Mortgage Rates Will Go Down" component drove the index slightly higher. On a year-over-year basis, the forward-looking mortgage rates component rose by 35 percentage points.
"Growing expectations that mortgage rates will remain flat or decline are reflected in the HPSI's latest reading, which is now at a survey high even though other indicators of economic and housing market sentiment are flat to negative," said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist. "Unfortunately, much of the lower interest rate environment can be attributed to global economic uncertainties, which appear to have dampened consumer sentiment regarding the direction of the economy. We do expect housing market activity to remain relatively stable, and the favorable rate environment should continue supporting increased refinance activity."
Other survey findings
--The main index is up 5.8 points compared from a year ago.
--The net share of Americans who say it is a good time to buy a home decreased 1 percentage point to 25%, but improved by 4 percentage points from a year ago.
--The net share of those who say it is a good time to sell a home decreased by 4 percentage points to 40%, but rose by 2 percentage points from a year ago.
--The net share of those who say home prices will go up over the next 12 months decreased by 1 percentage point to 36% and fell by 2 percentage points from a year ago.
--The net share of Americans who say mortgage rates will go down over the next 12 months increased by 11 percentage points to -17%. This component is up 35 percentage points from the same time last year.
--The net share of Americans who say they are not concerned about losing their job over the next 12 months decreased by 4 percentage points to 77% and fell by 3 percentage points from a year ago.
--The net share of those who say their household income is significantly higher than it was 12 months ago remained unchanged at 21% and fell by 1 percentage point from a year ago.