Survey Sees End of Home Price Juggernaut


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Americans may be growing a bit pessimistic about housing, that came through loud and
clear in the results of Fannie Mae’s February edition of the National Housing
Survey (NHS).  Fannie Mae said its Home
Purchase Sentiment Index (HPSI), which is a distillation of some of the answers
to the survey, dropped 3.7 points in February, reversing to the penny the
increase posted in January. The HPSI returned to its December level of 85.8,
down 2.5 points compared with the February survey results in 2017.



Five of the six components that go into constructing the
HPSI were lower, including the net percentage of both those saying it was a
good time to buy and those who think it is a good time to sell.  The good time to buy question elicited net
positive responses from 22 percent of respondents, down 5 percentage points
from January. The good time to sell net dipped 2 points to 36 percent.

Expectations for increasing home prices also stalled
out. The net positive responses about continuing appreciation hit a recent high
of 52 percent in January but plunged 7 percentage points in the current
survey.  Among those who still expect
higher prices, the rate of anticipated gains dropped from 3.7 percent to 3.3

optimism about moderating home prices was offset by increased concern over
mortgage rates.
The net share of those who say
mortgage rates will go down over the next 12 months fell 7 percentage points to

Americans expressed a weakened sense
of job security
, with the net share who say they are not concerned about losing
their job decreasing 2 percentage points. Finally, the net share reporting that
their income is significantly higher than it was 12 months ago increased 1
percentage point. Within that net, the share who say their household income is
significantly lower than it was 12 months ago fell 2 percentage points to 9%,
matching a survey low last seen in February 2017.

“Volatility in consumer housing
sentiment continued into February, with the new tax law beginning to impact
respondents’ take-home pay and the stock market creating negative headlines due
to early-month turbulence,” said Doug Duncan, senior vice president and chief
economist at Fannie Mae. “Additionally, consumers’ expectations for higher
mortgage rates suggest that consumers expect the Fed to hike rates a few more
times in 2018.
We will continue to track how consumer housing attitudes trend
in the coming months as these various market forces play out.”

The Home Purchase Sentiment Index
(HPSI) converts information about consumers’ home purchase sentiment from six NHS
questions 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 NHS is conducted monthly by
telephone among 1,000 consumers, both homeowners and renters.  Respondents are asked more than 100 questions
to track attitudinal shifts.  The February
survey was conducted between February 1, 2018 and February 23, 2018.

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