WASHINGTON –Feb. 7, 2018 – The Fannie Mae Home Purchase Sentiment Index® (HPSI) rose 3.7 points in January to 89.5, reversing the decrease seen last month and reaching a new all-time survey high. The rise can be attributed to increases in five of the six HPSI components. The HPSI is up 6.8 points compared with the same time last year.
The net share of respondents who said now is a good time to buy a home increased 3 percentage points to 27%, reversing some of December's decline. Additionally, the net share who reported that now is a good time to sell a home increased 4 percentage points and is now up 23 percentage points year-over-year.
The net share who said home prices will go up in the next 12 months increased 8 percentage points in January, reaching a new survey high of 52%. The percentage who said home prices will go up reached a new survey high of 58%.
Meanwhile, Americans also expressed a greater sense of job security, with the net share who say they are not concerned about losing their job increasing 5 percentage points to 73%.
Finally, the net share of consumers who said mortgage rates will go down over the next 12 months increased 2 percentage points in January, while the net share reporting that their income is significantly higher than it was 12 months ago remained at 16% from December.
"HPSI rebounded from last month's dip to a new survey high in January, in large part due to the spike in consumers' net expectations that home prices will increase over the next year," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "Results may continue to fluctuate over the coming months as consumers sort out the implications of the newly passed tax legislation on their household finances.
Over the past year, continued home price growth has helped spur a sizable increase in the net share of consumers who say it's a good time to sell a home but also a modest weakening in the net share who say it is a good time to buy. At the start of 2018, it is still too early to determine the overall effect of the new tax legislation on housing, and we will need to see whether positive impacts on both housing demand and supply materialize in the coming months.'
The Home Purchase Sentiment Index 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 January 2018 National Housing Survey was conducted between Jan. 2, 2018 and Jan. 25, 2018, polling about 1,000 Americans. Most of the data collection occurred during the first two weeks of this period. Interviews were conducted by PSB, in coordination with Fannie Mae.