Confidence in Housing Levels as Rates Steady
With expectations of lower mortgage rates, confidence in the housing market is stabilizing, according to the Fannie Mae Home Purchase Sentiment Index® (HPSI), newly released.
In June, the HPSI retreated 0.5 points—down from May's near-record, but only slightly.
"Growing expectations that mortgage rates will remain steady suggest improved stability for housing affordability and helped keep the HPSI relatively flat this month," says Doug Duncan, senior vice president and chief economist at Fannie Mae.
According to Duncan, confidence is fluctuating market to market, and appears to be correlated to home prices.
"Regional variations in housing optimism appear to be tied to a divergence in housing affordability," Duncan says. "For example, home purchase sentiment is higher in the Midwest and South than in the West and, to a lesser extent, the Northeast, where the lack of entry-level inventory and the resultant strong price appreciation has had a more profound impact on affordability.
"With fewer consumers expecting rates to jump back up—thereby creating less urgency to buy now—we expect housing market activity to remain stable."
Source: Fannie Mae