Fannie Mae’s Home Purchase Sentiment Index (HPSI), measuring consumers’ opinions of the state of the housing market, rose by 3.2 points in June, erasing the previous month’s dip and inching closer to a likely plateau reached earlier in the year.
The increase in the index brought it to a reading of 72.6, just two-tenths of a point shy of its high-water mark in 2024. The index reading is derived from consumer survey answers to six component questions, two of which saw notable rebounds from one month prior.
Nineteen percent of consumers said that they believe it’s currently a good time to buy a home, up from 14% — a survey low — in May. Conversely, the percentage of respondents who indicated that it’s a bad time to buy decreased from 86% to 81%, leading to the net share of people who think it’s a good time to buy growing by 9 percentage points.
The share of people who believe it’s a good time to sell has also improved, rising from 64% to 66%, while the percentage why say it’s a bad time to sell has decreased from 35% to 33%. As a result, the net share of those who say it’s a good time to sell is up 4 percentage points month over month.
Some consumers also expressed more confidence in their household finances compared to one month prior, with the net share of those who say they aren’t concerned about job loss was up by 8 percentage points from May. There was a slight decrease in the net share of those who say their household income is “significantly higher” than it was one year ago, ebbing by 2 percentage points month over month.
Despite improvements in several categories, affordability continues to be a persistent worry, with larger shares of consumers saying they believe that home prices and mortgage rates will go up over the next 12 months.
“Affordability concerns remain the primary driver of consumer housing sentiment, even as the topline findings from our monthly survey showed a modest uptick in optimism on both homebuying and home-selling conditions,” said Mark Palim, vice president and deputy chief economist at Fannie. “If mortgage rates decline through the end of the year, as we currently forecast, we do think home sales activity will pick up, but progress on that front is likely to be slow due to the ongoing imbalance between supply and demand.
“A significant majority of consumers continue to tell us that it’s a ‘bad time’ to buy a home, and they’re also telling us that they expect both home prices and mortgage rates to move higher over the next 12 months,” Palim continued. “Taken together, in our view, this leaves little upside to overall sentiment until meaningful progress is made on affordability — most likely in the form of either lower rates or improved supply.”
