Expectations of rising mortgage rates and unstable economic conditions are making consumers slightly pessimistic about buying homes, according to a new consumer sentiment survey about the housing market launched by Fannie Mae.

Takeaways:

  • Fannie Mae announced the launch of the Home Purchase Sentiment Index (HPSI).
  • Consumer attitudes toward the current home selling climate have slid back to their April 2015 level, contributing to a slight decline in the August HPSI.
  • Respondents also seem to feel that home prices will increase in the next year, with 47 percent expressing that sentiment.

Expectations of rising mortgage rates and unstable economic conditions are making consumers slightly pessimistic about buying homes, according to a new consumer sentiment survey about the housing market launched by Fannie Mae.

However, because many consumers are optimistic about the job market and their household finances, they aren’t turning their backs on the housing market just yet, Fannie Mae said.

The government sponsored enterprise today announced the launch of the Home Purchase Sentiment Index (HPSI), which builds on Fannie Mae’s existing National Housing Survey and offers additional insights about current and future-looking housing market outcomes. The monthly HPSI is intended to complement other data sources and inform housing-related analysis.

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According to Doug Duncan, Fannie Mae’s senior vice president and chief economist, consumer attitudes toward the current home selling climate have slid back to their April 2015 level, contributing to a slight decline in the August HPSI.

“Those who think it’s a good time to buy or sell a home have consistently pointed to favorable mortgage rates as the primary reason for their optimism. Those who think it’s a bad time to buy or sell a home have consistently pointed to unfavorable economic conditions as the primary reason for their pessimism,” Duncan said.

Still, a four-year upward trend in the HPSI indicates that consumers remain fairly optimistic about the housing market, he added.

Here’s what the HPSI tells us: The percent of respondents who feel it’s a good time to buy a house rose to 63 percent, rising 2 percentage points from last month’s all-time survey low.

Those who say it is a good time to sell rose 2 percentage points to 47 percent. The percent of respondents who say it is a bad time to sell, however, also increased to 44 percent.

Respondents also seem to feel that home prices will increase in the next year, with 47 percent expressing that sentiment. Only 9 percent of respondents said they think home prices will decrease, according to the index.

As for mortgage rates, slightly more than half of respondents, or 54 percent, said they expect rates to increase in the next year. Only 5 percent said they expect rates to decline, possibly reflecting everyone’s anticipation of the Fed’s interest rate hike sometime this fall.

Overall, consumers feel pretty good about their financial situations, Fannie Mae said. The share of respondents who say they are not concerned with losing their job rose to 83 percent, while the share of respondents who say they are concerned with losing their job fell to 16 percent.

Compared to this time last year, 24 percent said their household income is higher now, while those who said it is significantly lower fell to 12 percent, according to the index.

Email Amy Swinderman.

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