The Fannie Mae Home Purchase Sentiment Index (HPSI) decreased in December for the fifth consecutive month, dipping 0.5 points to 80.7. The six components that comprise the HPSI showed mixed results in December. The net shares of consumers expecting mortgage rates to go down over the next 12 months and those who believe their household income is significantly higher today compared to year-ago levels fell four and five percentage points, respectively.
However, the net share of Americans who say it is a good time to buy a house rose by two percentage points, and the net share of consumers reporting confidence in not losing their job rose four percentage points. Both the net percentage of those who believe it is a good time to sell and the net share who believe that home prices will go up remained unchanged in December.
“Despite the post-election bump in general consumer attitudes, a rapid rise in mortgage rate expectations has tamped down home purchase sentiment, at least in the near term. A spike in economic optimism in the immediate aftermath of an election is typical. Whether consumers will sustain this level of optimism into 2017 remains unclear,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.