Americans Feeling Better About Housing, Thanks to the Economy
Although consumers are feeling slightly less inclined to buy or sell a home right now, their overall sentiments toward home buying are being bolstered by positive happenings in the economy at large, as evidenced by the most recent Fannie Mae Home Purchase Sentiment Index® (HPSI), which increased in August 2018 for the first time since May, edging up 1.5 points to 88.
The uptick is largely attributed to increases in the job- and income-related HPSI components. For example, the net share of Americans who said they aren’t concerned about losing their job increased by 15 percentage points in August, a big jump from the previous month, which witnessed an 11 percentage point decrease. This jump in attitudes toward job security helped to offset decreases in sentiments toward housing.
Another positive sign? The number of survey respondents who said their household income is significantly higher than it was 12 months ago increased by 1 percentage point, which also played into an overall positive outlook for housing.
That said, specific sentiments toward housing are still reflecting some negativity, including the net share of survey respondents who said now is a good time to buy a home, which fell 3 percentage points, as well as the net share who said it is a good time to sell a home, which also fell 3 percentage points. Finally, the net share of respondents who said that home prices will go up in the next 12 months decreased 1 percentage point.
As Doug Duncan, senior vice president and chief economist at Fannie Mae explains, the statistics reflect the conflict between a strengthening macro economy and current challenges in the housing market. "Consumers were less optimistic this month about both home-buying and home-selling conditions, while perceptions of income growth and confidence about job security are at survey highs,” he explains. “After years of robust home price growth outpacing income growth, consumers face significant housing affordability challenges at the low end of the market."