Fannie Mae’s Home Purchase Sentiment Index reported a decline in the consumer perception of homebuying as affordability and supply concerns grow. While the HPSI remained relatively flat in May 2021, Fannie Mae reported that four of its six components increased month-over-month.
Additionally, more consumers had a pessimistic view of the current homebuying conditions, with just 35% of respondents stating that they believe it is a good time to purchase a home.
“The HPSI remained relatively flat in May, although some of its underlying components shifted significantly, with consumers feeling substantially more positive about their jobs and income, while at the same time showing even greater pessimism about homebuying conditions compared to last month,” said Doug Duncan, senior vice president and chief economist. “The ‘good time to buy’ component fell further — hitting another all-time survey low – as consumers appear to be acutely aware of higher home prices and the low supply of homes, the two reasons cited most frequently for that particular sentiment. However, despite the challenging buying conditions, consumers do appear more intent to purchase on their next move, a preference that may be supported by the expectation of continued low mortgage rates, as well as the elevated savings rate during the pandemic, which may have allowed many to afford a down payment.”
According to the report, 67% of sellers believe it is a good time to sell a home while 25% felt the opposite. More respondents are showing an optimistic view when it comes to mortgage rates. Fannie’s HSPI reported that 49% of respondents believe that mortgage rates will increase, down from 54% in the previous HSPI.