A majority of Americans believe home prices will go up over the next 12 months, but whether now is a good time to buy or sell is still up for debate, according to a Fannie Mae survey of household decision makers released on Wednesday.
Fifty-eight percent of Americans believe home prices nationwide will increase in 2018, according to the monthly Fannie Mae Home Purchase Sentiment Index (HPSI), which measures housing market perceptions and attitudes. Overall, the index rose 3.7 points in January to 89.5, a reversal from December, suggesting Americans are more optimistic about the housing market.
“HPSI rebounded from last month’s dip to a new survey high in January, in large part due to the spike in consumers’ net expectations that home prices will increase over the next year,” said Doug Duncan, senior vice president and chief economist at Fannie Mae, in a statement. “Results may continue to fluctuate over the coming months as consumers sort out the implications of the newly passed tax legislation on their household finances.”
The net share of Americans who believe now is a good time to buy a home rose 3 percentage points to 27 percent, reversing a 5 percent decline from last month. But the share of Americans who say now is a good time to sell rose by 4 percentage points to 38 percent.
The overall HPSI increase, according to Fannie Mae, is due to growing confidence in five of six survey categories, including job security and the belief that mortgage rates will go down.
Home Purchase Sentiment highlights:
Fannie Mae’s 2017 Home Purchase Sentiment Index increased in January by 3.7 points to 89.5. The HPSI is up 6.8 points compared with the same time last year.
- The net share of Americans who say it is a good time to buy a home rose 3 percentage points to 27%, reversing some of last month’s decline.
- The net share of those who say it is a good time to sell rose 4 percentage points to 38%. The share who said it is a good time to sell reached a new survey high of 65%.
- The net share of Americans who say home prices will go up rose 8 percentage points to 52% in January, reaching a new survey high. The percentage who said home prices will go up reached a new survey high of 58%.
- The net share who say mortgage rates will go down over the next 12 months rose 2 percentage points to -50%.
- The net share who say they are not concerned about losing their job rose by 5 percentage points to 73%.
- The net share of Americans who say their household income is significantly higher than it was 12 months ago remained at 16% from last month.
About HPSI
The Home Purchase Sentiment Index distills information about consumers’ home purchase sentiment from Fannie Mae’s National Housing Survey (NHS) into a single number. The HPSI reflects consumers’ current views and forward-looking expectations of housing market conditions and complements existing data sources to inform housing-related analysis and decision making. The HPSI is constructed from answers to six NHS questions that solicit consumers’ evaluations of housing market conditions and address topics that are related to their home purchase decisions.
Email Jotham Sederstrom.
