Consumer Housing Sentiment Up Significantly Year over Year

Rhea-AI Summary

The Fannie Mae Home Purchase Sentiment Index® (HPSI) rose 0.4 points to 75.0 in November, marking a 10.7-point increase year over year. A record number of consumers expect mortgage rates to decline over the next 12 months, with 45% anticipating a decrease. The share of respondents viewing it as a 'good time to buy' increased to 23%, up from 14% last year.

The percentage saying it's a 'good time to sell' remained stable at 64%. Home price expectations showed slight changes, with 38% expecting prices to rise and 25% anticipating decreases. Consumer confidence appears to be improving as people adapt to the current high mortgage rate and home price environment, though these factors remain the primary concerns for potential buyers.

Positive

• HPSI increased 10.7 points year-over-year, showing improved market sentiment
• Record-high 45% of consumers expect mortgage rates to decline
• Good time to buy sentiment increased to 23% from 14% last year
• 64% of respondents maintain it's a good time to sell
• 78% of employed respondents are not concerned about job loss

Negative

• 77% still believe it's a bad time to buy a home
• Home price expectations declined, with net positive sentiment dropping 5 percentage points
• Household income sentiment decreased, with only 16% reporting significantly higher income

Jump in Confidence Driven Largely by Increased Optimism that Mortgage Rates Will Fall

WASHINGTON, Dec. 9, 2024 /PRNewswire/ -- The Fannie Mae (OTCQB: FNMA) Home Purchase Sentiment Index^® (HPSI) increased 0.4 points in November to 75.0, continuing its sharp upward trend over the past year as consumers appear to be acclimating to the higher mortgage rate and home price environment. This month, a new record-high share of consumers indicated that they expect mortgage rates to decline over the next 12 months, while fewer respondents said they expect home prices to rise. While only 23% believe it's a "good time to buy a home," on net that component continued its upward trend, and is now notably higher than last November's share of 14%. The share of respondents saying it's a "good time to sell" remained flat month over month but is also up from last year. Year over year, the HPSI is up 10.7 points.

"Over the past year, we have seen a significant improvement in general consumer sentiment toward the housing market, largely driven by increased optimism that mortgage rates will fall and improved perceptions of both homebuying and home-selling conditions," said Mark Palim, Fannie Mae Senior Vice President and Chief Economist. "Notably, this improvement in sentiment continues a trend that began about two and a half years ago following the sizeable run-up in home prices during the pandemic, and it is likely due in part to consumers' slow-but-steady acclimation to current market conditions. Of course, high home prices and high mortgage rates remain the primary reasons why the vast majority of consumers think it's a 'bad time to buy' — trends that we expect to continue into the new year."

Palim continued: "Fortunately, a sharply growing share of consumers say they expect their personal financial situation to improve over the next year. Additionally, more consumers expect home price growth to slow, a belief recently shared by our expert panelists, as well, which may help ease some of the affordability burden and incentivize some households, especially those who have been waiting in the wings, to finally act on their home purchase decision."

Home Purchase Sentiment Index – Component Highlights

Fannie Mae's Home Purchase Sentiment Index (HPSI) increased 0.4 points in November to 75.0. The HPSI is up 10.7 points compared to the same time last year. Read the full research report for additional information.

• Good/Bad Time to Buy: The percentage of respondents who say it is a good time to buy a home increased from 20% to 23%, while the percentage who say it is a bad time to buy decreased from 80% to 77%. As a result, the net share of those who say it is a good time to buy increased 6 percentage points month over month to negative 54%.
• Good/Bad Time to Sell: The percentage of respondents who say it is a good time to sell a home remained unchanged at 64%, while the percentage who say it's a bad time to sell also remained unchanged at 35%. As a result, the net share of those who say it is a good time to sell remained unchanged month over month at 29%.
• Home Price Expectations: The percentage of respondents who say home prices will go up in the next 12 months decreased from 39% to 38%, while the percentage who say home prices will go down increased from 23% to 25%. The share who think home prices will stay the same decreased from 38% to 36%. As a result, the net share of those who say home prices will go up in the next 12 months decreased 5 percentage points month over month to 12%.
• Mortgage Rate Expectations: The percentage of respondents who say mortgage rates will go down in the next 12 months increased from 39% to 45%, while the percentage who expect mortgage rates to go up increased from 22% to 25%. The share who think mortgage rates will stay the same decreased from 38% to 29%. As a result, the net share of those who say mortgage rates will go down over the next 12 months increased 4 percentage points month over month to 20%.
• Job Loss Concern: The percentage of employed respondents who say they are not concerned about losing their job in the next 12 months decreased from 79% to 78%, while the percentage who say they are concerned remained unchanged at 20%. As a result, the net share of those who say they are not concerned about losing their job remained unchanged month over month at 58%.
• Household Income: The percentage of respondents who say their household income is significantly higher than it was 12 months ago decreased from 18% to 16%, while the percentage who say their household income is significantly lower increased from 11% to 12%. The percentage who say their household income is about the same increased from 70% to 71%. As a result, the net share of those who say their household income is significantly higher than it was 12 months ago decreased 1 percentage point month over month to 5%.

About Fannie Mae's Home Purchase Sentiment Index
The Home Purchase Sentiment Index^® (HPSI) distills information about consumers' home purchase sentiment from Fannie Mae's National Housing Survey^® (NHS) into a single number. The HPSI reflects consumers' current views and forward-looking expectations of housing market conditions and complements existing data sources to inform housing-related analysis and decision-making. The HPSI is constructed from answers to six NHS questions that solicit consumers' evaluations of housing market conditions and address topics that are related to their home purchase decisions. The questions ask consumers whether they think that it is a good or bad time to buy or to sell a house, what direction they expect home prices and mortgage interest rates to move, how concerned they are about losing their jobs, and whether their incomes are higher or lower than they were a year earlier.

About Fannie Mae's National Housing Survey
The National Housing Survey (NHS) is a monthly attitudinal survey, launched in 2010, which polls a representative sample of adult household financial decision makers in the United States, to assess their attitudes toward owning and renting a home, purchase and rental prices, household finances, and overall confidence in the economy. Each respondent is asked more than 100 questions, making the NHS one of the most detailed longitudinal surveys of its kind to track attitudinal shifts, six of which are used to construct the HPSI (findings are compared with the same survey conducted monthly beginning June 2010). For more information, please see the Technical Notes.

Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to support the housing market. The November 2024 National Housing Survey was conducted between November 1, 2024, and November 19, 2024. Most of the data collection occurred during the first two weeks of this period. The latest NHS was fielded exclusively through AmeriSpeak^®, NORC at the University of Chicago's probability-based panel, in coordination with Fannie Mae and PSB Insights. Calculations are made using unrounded and weighted respondent-level data to help ensure precision in NHS results from wave to wave. As a result, minor differences in calculated data (summarized results, net calculations, etc.) of up to 1 percentage point may occur due to rounding.

Detailed HPSI & NHS Findings
For detailed findings from the Home Purchase Sentiment Index and National Housing Survey, as well as a brief HPSI overview and detailed white paper, technical notes on the NHS methodology, and questions asked of respondents associated with each monthly indicator, please visit the Surveys page on fanniemae.com. Also available on the site are in-depth special topic studies, which provide a detailed assessment of combined data results from three monthly studies of NHS results.

To receive e-mail updates with other housing market research from Fannie Mae's Economic and Strategic Research Group, please click here.

About the ESR Group
Fannie Mae's Economic and Strategic Research Group, led by Chief Economist Mark Palim, studies current data, analyzes historical and emerging trends, and conducts surveys of consumer and mortgage lender groups to provide forecasts and analyses on the economy, housing, and mortgage markets.

About Fannie Mae
Fannie Mae advances equitable and sustainable access to homeownership and quality, affordable rental housing for millions of people across America. We enable the 30-year fixed-rate mortgage and drive responsible innovation to make homebuying and renting easier, fairer, and more accessible. To learn more, visit:
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https://www.fanniemae.com/news

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Opinions, analyses, estimates, forecasts, beliefs, and other views of Fannie Mae's Economic & Strategic Research (ESR) Group or survey respondents included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, estimates, forecasts, beliefs, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, beliefs, and other views published by the ESR Group represent the views of that group or survey respondents as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.

 

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SOURCE Fannie Mae

FAQ

What was Fannie Mae's (FNMA) HPSI score in November 2024?

Fannie Mae's Home Purchase Sentiment Index (HPSI) reached 75.0 in November 2024, increasing 0.4 points from the previous month.

What percentage of consumers expect mortgage rates to decrease in 2024?

45% of consumers expect mortgage rates to decrease over the next 12 months, reaching a record-high percentage.

How much did the FNMA HPSI increase year-over-year in November 2024?

The HPSI increased by 10.7 points compared to the same time last year.

What percentage of respondents believe it's a good time to sell a home in November 2024?

64% of respondents indicated it's a good time to sell a home in November 2024.