The Fannie Mae (FNMA/OTCQB) Home Purchase Sentiment Index® (HPSI) rose for the third consecutive month, increasing 1.3 points in January to 93.0 and moving closer to the survey high of 93.8 set last year. Four of the six HPSI components increased month over month, including the percentage of Americans who believe that mortgage rates will go down or stay the same over the next 12 months, which now sits at 55 percent. Year over year, the HPSI is up 8.3 points, reflecting in part consumers’ increasingly positive view that it’s a good time to both buy and sell a home.
“The HPSI posted another strong reading to open the new year, helped in large part by the upward trend in the share of consumers saying they expect mortgage rates to remain steady,” said Doug Duncan, Senior Vice President and Chief Economist. “Low rates continue to be a key driver of consumer optimism about both current homebuying and home-selling conditions. Favorable views on job security and personal financial expectations reflect the strength of the labor market, which we believe will continue to bolster housing demand. With much-needed inventory set to come online this year, offering a modicum of relief to the shortage of entry-level supply, this month’s HPSI reading remains consistent with our latest macroeconomic forecast and our theme for 2020: A Resilient Economy Overcomes Risks to Drive Housing.”