Consumers Felt Slightly More Optimistic About The Housing Market In October

Consumers were feeling a little better about the housing market in October, but remain pessimistic overall.

Only 20% of consumers believe it’s a good time to purchase a home, according to Fannie Mae’s Home Purchase Sentiment Index.

The October HPSI increased by 0.7 points to 74.6, its highest level since February 2022 and a decent distance from its 10-year low of 63, recorded in April 2020. The full index is up 9.7 points YOY.

Affordability was the main concern of the consumers surveyed. The “Good Time to Buy” indicator increased, while more consumers said it’s a bad time to sell.

Respondents were static on the topic of mortgage rates. Consumers on net believe rates will decline in the next twelve months, but most movement came from those who think rates will stay the same.

Rates jumped at the beginning of October, right when this survey was being conducted, probably impacting consumers’ views on the subject.

Ultimately, high home prices are the main driver for buyers struggling with affordability.

“One effect of the prolonged period of relatively high home prices of the past four years is that we are seeing a slowly growing preference to rent rather than buy on consumers’ next move. With rent growth expected to remain modest in 2025, more consumers may be seeking – and finding – attractive deals in the rental market as they continue saving toward a future home purchase,” said Mark Palim, Fannie Mae Senior Vice President and Chief Economist.