Consumers remain pessimistic on mortgage rates and home values, but believe now is a good time to buy and a good time to sell a home, according to a new survey by Freddie Mac.
The Fannie Mae Home Purchase Sentiment Index® (HPSI) dropped for the third time in a row from 1.1 points to 81.7 in October.
Here are the key points from the survey:
- The net share of Americans who say it is a good time to buy a house rose by 2 percentage points to 31%. The share who think it is a good time to buy remained at an all-time survey low.
- The net percentage of those who say it is a good time to sell rose 4 percentage points to 19% in October, 1 percentage point away from the all-time survey high seen in July. The share who think it is a bad time to sell tied an all time survey low last reached in July.
- The net share of Americans who say that home prices will go up continued to fall in October, falling 3 percentage points from last month to 31%.
- The net share of those who say mortgage rates will go down over the next 12 months fell 1 percentage point to -45%.
- The net share of Americans who say they are not concerned with losing their job fell 1 percentage point to 69%.
- The net share of Americans who say their household income is significantly higher than it was 12 months ago fell 8 percentage points to 4%, the lowest it has been in more than three years.
The senior vice president and chief economist at Fannie Mae, Doug Duncan had said this about the survey, “The HPSI fell in October for the third straight month from its record high in July, reaching the lowest level since March. Recent erosion in sentiment likely reflects, in part, enhanced uncertainty facing consumers today.
Since July, more consumers, on net, have steadily expected mortgage rates to rise and home price appreciation to moderate. Furthermore, consumers’ perception of their income over the past year deteriorated sharply in October to the worst showing since early 2013, weighing on the index. However, this component of the HPSI is volatile from month to month, and the firming trend in wage gains from the October jobs report, if sustained, may foreshadow an improving view in the near future.”