Judging by the Fannie Mae Home Purchase sentiment Index (HPSI), consumers are getting used to higher mortgage rates and home prices.

The latest HPSI, which gauges consumer sentiment about the housing market, continued an upward trajectory, increasing 0.4 points in November to 75.0. The survey found a general improvement in overall attitudes toward the housing market, with a record-high share of consumers expecting mortgage rates to fall during the next 12 months, while fewer respondents than in past months said they expect home prices to rise.

November’s results showed that 23% of respondents said now is a good time to buy a home, a 9% increase from the survey’s findings from a year ago. The share of respondents who said it was a good time to sell was flat month over month but has also increased from one year ago. Overall, the HPSI was up10.7 points from November 2023’s reading of 64.3.

One area where sentiment improved the most was in the expectations surrounding interest rates. Some 45% of respondents expect interest rates to fall in the next 12 months, a jump of 23% from a year ago. Only 25% of respondents expect interest rates to rise, down 19% from November 2023. About 29% say interest rates will stay the same.

About 38% of respondents say home prices will go up, which was down 3% from a year ago. Those who expect prices to fall in the next year reached 25%, which was up 2% in the past year. Another 36% said prices will stay the same, which was down 2% from November 2023.

“Over the past year, we have seen a significant improvement in general consumer sentiment toward the housing market, largely driven by increased optimism that mortgage rates will fall and improved perceptions of both homebuying and home-selling conditions,” said Mark Palim, Fannie Mae’s senior vice president and chief economist. “Notably, this improvement in sentiment continues a trend that began about two and a half years ago following the sizeable run-up in home prices during the pandemic, and it is likely due in part to consumers’ slow-but-steady acclimation to current market conditions. Of course, high home prices and high mortgage rates remain the primary reasons why the vast majority of consumers think it’s a ‘bad time to buy,’ trends that we expect to continue into the new year.”