Latest Fannie Mae sentiment survey underscores growing home-market frustrations

Fannie Mae’s latest Home Purchase Sentiment Index (HPSI) report further drove home the perceptions of frustration and pessimism circulating within U.S. consumers and homebuyers.

The HPSI dropped by 3.4 points month over month and by 14.9 points year over year in June to a reading of 64.8. That’s the second-lowest level for the index in the past decade.

The share of survey participants who said it is a good time to buy a home actually grew from 17% to 20% during the month, while the percentage who say it is a bad time slid from 79% to 75%. As a result, the net share of those who say it’s a good time to buy rose 7 percentage points. But for the first time in nearly seven years, a plurality of respondents indicated that it would be hard to get residential mortgage financing.

“Approximately half of all respondents indicated that it would be ‘difficult’ to get a mortgage, the highest such percentage since 2014,” said Doug Duncan, Fannie Mae’s senior vice president and chief economist. “As a whole, this month’s HPSI results are consistent with our forecast of a slowing housing market through the rest of this year and next.”

Notably, the weakening demand and cooling competition brought about by rising rates and still-high home prices also appear to be taking a toll on consumer perceptions of home-selling conditions, which “declined meaningfully in June, returning to pre-pandemic levels,” according to Duncan.

The share of respondents who indicated that it’s a good time to sell a home decreased from 76% to 68%, while the percentage who believe it’s a bad time grew from 19% to 26%. That pushed the net share of those who say it is a good time to sell down by 15 percentage points month over month.

But it’s not just the housing market that Americans are dissatisfied with, according to Fannie’s survey. Eighty-one percent of consumers — an all-time high for the HPSI poll — believe the economy is on the “wrong track.”

“In June, a survey-record 81% of consumers reported that the economy is on the wrong track, suggesting to us — and corroborated by other recently released consumer confidence measures — that people appear to be growing increasingly frustrated with inflation and the slowing economy,” Duncan said.

“Moreover, 21% of respondents expressed job stability concerns, the highest percentage in 18 months,” he added. “This month’s HPSI reading reflects these macroeconomic and personal financial concerns, with housing sentiment additionally diminished by the recent rapid increases in mortgage rates.”


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