The Home Sentiment Index rose 5.2 points to 81.7 this month, “nearly reaching pre-pandemic levels,” finding that more owners consider it a good time to sell. However, even the number of optimistic buyers rose a bit: Attitudes about mortgage rates were the only notable decline.
WASHINGTON – Fannie Mae’s monthly Home Purchase Sentiment Index® (HPSI) increased in March by 5.2 points to 81.7, a notable improvement in buyers’ and sellers’ attitudes about the real estate market.
Four of the HPSI’s six components increased month-over-month, including the components related to homebuying and home-selling conditions, household income and home prices. The mortgage rate outlook saw the only decline, with only 6% of consumers believing mortgage rates will decrease over the next 12 months. The HPSI is up 0.9 points year-to-year.
“The significant increase in the HPSI in March reflects consumer optimism toward the housing market and larger economy as vaccinations continue to roll out, a third round of stimulus checks was distributed, and the spring homebuying season began – perhaps with even more intensity this year, since 2020’s spring homebuying season was limited by virus-related lockdowns,” says Doug Duncan, Fannie Mae senior vice president and chief economist.
“Home-selling sentiment experienced positive momentum across most consumer segments – nearly reaching pre-pandemic levels and generally indicative of a strong seller’s market,” he adds. “Consumers once again cited high home prices and tight inventory as primary reasons why it’s a good time to sell.”
However, the “good time to buy” component, while improving over February, still has not returned to pre-pandemic levels, because buying a home “continues to prove difficult for many of the same reasons (as it did last year), namely high prices and a lack of supply,” Duncan adds.
Home Purchase Sentiment Index overview for March
- Good/bad time to buy: The percentage of respondents saying it’s a good time to buy a home increased from 48% to 53%; the percentage saying it’s a bad time decreased from 43% to 40%.
- Good/bad time to sell: The percentage of respondents who say it’s a good time to sell a home increased from 55% to 61%; the percentage who say it’s a bad time decreased from 35% to 28%.
- Home prices: The percentage who think home prices will go up in the next 12 months increased from 47% to 50%; the percentage who say home prices will go down decreased from 18% to 14%; the percentage who expect no change was 29%, the same as the month before.
- Mortgage rates: The percentage who think mortgage rates will go down in the next 12 months decreased from 8% to 6%; the percentage who expect mortgage rates to go up increased from 47% to 54%; and those who expect no change decreased from 38% to 34%.
- Jobs: The percentage who aren’t concerned about losing their job in the next 12 months was unchanged at 82%, while the concerned percentage remained unchanged at 17%.
- Household income: The percentage saying their household income is significantly higher than 12 months ago increased from 17% to 25%; the percentage saying it’s significantly lower decreased from 19% to 15%; and the percentage noting little change decreased from 61% to 56%.
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Author: kerrys