Despite lower mortgage rates and improving affordability, overall homebuyer sentiment declined in August, with job insecurities weighing on consumer attitudes.
Fannie Mae’s Home Purchase Sentiment Index (HPSI), fell 0.4 points last month to a reading of 71.4. Down 0.7 points year over year, the HPSI gauges consumer attitudes about current homebuying and selling conditions and measures outlooks on home prices, mortgage rates and job loss concerns.
About 28% of survey respondents said August was a good time to buy a home, up from 23% in July.
Amid a backdrop of easing mortgage rates — which fell 16 basis points during the month to average 6.56% for the week ending Aug. 28, according to Freddie Mac — 33% of August respondents thought rates would continue to decline over the next 12 months. In July, just 28% predicted a decrease in interest rates over the year ahead.
The percentage of people who predicted a 12-month decline in home prices also improved to 22% in August versus 18% in July.
But 27% of participants in the Fannie Mae survey said they are worried about losing their job over the next year, up from 24% in July.
That downbeat labor sentiment echoed survey data released Monday by the Federal Reserve Bank of New York’s Center for Microeconomic Data. It found that the mean perceived probability of finding a new job if laid off plummeted by 5.8 percentage points to 44.9% — the lowest reading since the New York Fed began tracking that data point in June 2013.
