Fannie Mae’s Home Purchase Sentiment Index (HPSI) fell 1.2 points to 74.5 in September. Three of the index’s six components dropped month-over-month. The full index is down 6.5 points year-over-year.
More consumers, 66%, reported that it’s a bad time to buy a home in September than in August, when 63% of respondents said the same. Only 28% said they believe it’s a good time to buy.
The home-selling conditions component stayed flat, as a majority of consumers reported they believe it’s a good time to sell.
“The HPSI declined slightly this month but remains within the general bounds we’ve seen since the end of last year,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist.
“The survey’s story is also largely unchanged: Consumers feel it’s a bad time to buy a home but a good time to sell – and they continue to cite high home prices as the primary reason. Across all consumer segments, renters and younger consumers were slightly more likely to indicate it’s a bad time to buy, perhaps a reflection of their generally lower incomes and their observation that the availability of affordable homes is lacking.”
Affordability is a problem for the housing market that isn’t about to go away. The median asking price for homes reached a record high this week at $365,073. Monthly mortgage payments for the average homebuyer rose $50 over the last six weeks, the result of home prices increasing 12% year-over-year.
“We’re also seeing a softening in consumers’ expectations that home prices will continue to increase; however, in our view, other housing market fundamentals remain supportive of further home price appreciation – including low levels of inventory and low interest rates,” Duncan said.
Here are some key findings from the report:
- The percentage of respondents who report it is a good time to sell a home rose one point to 74%, while the percentage who say it’s a bad time to sell stayed the same at 19%.
- The percentage that expect home prices to rise in the next twelve months fell from 40% to 37%, while the percentage who say home prices will fall stayed the same at 24%. The percentage who say home prices will stay the same rose to two points to 33%.
- The percentage of respondents who say mortgage rates will go down in the next 12 months increased from 6% to 8%, while the percentage who expect mortgage rates to go up decreased from 53% to 51%.
- The percentage of respondents who say their household income is significantly higher than it was 12 months ago increased from 26% to 27%, while the percentage who say their household income is significantly lower increased from 12% to 13%. The percentage who say their household income is about the same decreased from 59% to 57%.