Mortgage News - Home Purchase Sentiment Index: Affordability Concerns Dampen Buyer Enthusiasm, Boost Seller Confidence

Home Purchase Sentiment Index: Affordability Concerns Dampen Buyer Enthusiasm, Boost Seller Confidence

Mortgage News June 15, 2023

Based on the most recent Home Purchase Sentiment Index (HPSI) released by Fannie Mae, the index saw a decline of 1.2 points in May 2023, bringing it to a level of 65.6. This decrease can be attributed to consumers’ perceptions of homebuying and home-selling conditions being influenced by affordability constraints.

Out of the six key elements of the index, four experienced a monthly decrease, particularly in the categories of “good time to buy” and “good time to sell.” Survey respondents expressed a significant decline in their belief that it is a favorable time to buy a home, with the metric reaching near all-time lows.

However, the component measuring the perception of a good time to sell increased in May, reaching its highest level since July 2022. Additionally, for the second consecutive month, a larger percentage of consumers indicated their expectation of home prices rising in the next year.

Over the course of a year, the overall index has declined by 2.6 points. The index was established with a benchmark of 100, based on housing market activity in June 2010.

Mark Palim, Fannie Mae’s Vice President and Deputy Chief Economist, commented on the latest HPSI findings, stating that as we approach the end of the spring homebuying season, the recent HPSI results indicate that consumers are still concerned about affordability challenges, including high home prices and mortgage rates. Many consumers believe it is currently an unfavorable time to buy a home but a favorable time to sell one.

Palim further noted that consumers also expressed the belief that these affordability constraints will not improve in the near future, with a significant majority expecting both home prices and mortgage rates to either increase or remain the same over the next year.

He concluded by highlighting the impact of these affordability factors on the perceived difficulty of obtaining a mortgage, particularly among renters. Palim stated that interestingly, the same factors influencing affordability may also be influencing the perceived ease of securing a mortgage. Among renters, in particular, 81% believe that it would be challenging to obtain a mortgage at present, matching the highest recorded percentage in the survey.

Need a list of realtors in your area? Contact Jennifer Swanson at 260-223-9203 or Jennifer@SpecialtyContactDatabases.com

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Home Purchase Sentiment Index: Affordability Concerns Dampen Buyer Enthusiasm, Boost Seller Confidence

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