Fannie Mae’s monthly US Home Purchase Sentiment Index™ (HPSI) increased 1.6 points from the previous month and 1 point from the previous year to 85.3 in May. That’s an all-time high for the survey of homeowners and renters.
The index is factored on six components: Good Time to Buy (-1 from the previous month), Good time to Sell (-2), Home Prices Will Go Up (+5), Mortgage Rates Will Go Down (+3), Confidence about Not Losing Job (-2), and Household Income is Significantly Higher (+7).
The number of survey respondents who felt confident prices would rise was up to 42 percent, the highest number since May of 2015.
The number of survey respondents who felt confident mortgage rates would go down rose 3 points, putting the number at -43 percent.
Americans who felt confident they were going to move remained at 63 percent from last year. Those who thought it would be easy to get a mortgage rose to 55 percent year-over-year. Consumers who believe the US economy overall is on the wrong track rose 6 points to 58 percent (an all-time high).
“The current low mortgage rate environment has helped ease this pressure [to find affordable homes], and fewer than half of consumers expect rates to go up in the next year,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “While the May increase in income growth perceptions could provide further support to prospective home buyers as the spring/summer home buying season gains momentum, the effect may be muted by May’s discouraging jobs report.”
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