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Housing Sentiment at New High on Higher Home Price Expectations
Monday, February 12, 2018 6:40 AM

The Fannie Mae Home Purchase Sentiment Index (HPSI) rose 3.7 points in January to 89.5, reversing the decrease seen last month and reaching a new all-time survey high. The HPSI is up 6.8 points compared with the same time last year. The increase can be attributed to increases in five of the six HPSI components.

Additional Component Highlights

  • The net share of Americans who say it is a good time to buy a home rose 3 percentage points to 27 percent, 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 percent. The share who said it is a good time to sell reached a new survey high of 65 percent.
  • The net share of Americans who say home prices will go up rose 8 percentage points to 52 percent in January, reaching a new survey high. The percentage who said home prices will go up reached a new survey high of 58 percent.
  • The net share of those who say mortgage rates will go down over the next 12 months rose 2 percentage points to -50 percent.
  • The net share of Americans who say they are not concerned about losing their job rose by 5 percentage points to 73 percent.
  • The net share of Americans who say their household income is significantly higher than it was 12 months ago remained at 16 percent from last month.

"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. "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. Over the past year, continued home price growth has helped spur a sizable increase in the net share of consumers who say it's a good time to sell a home but also a modest weakening in the net share who say it is a good time to buy. At the start of 2018, it is still too early to determine the overall effect of the new tax legislation on housing, and we will need to see whether positive impacts on both housing demand and supply materialize in the coming months."

Learn more about Fannie Mae's Home Purchase Sentiment Index and National Housing Survey consumer attitude measures.