Fannie Mae's Report Shows Little Confidence

Sweet old Fannie Mae released a new survey that says consumers haven’t felt this bad about the housing market in a year and a half. The current interest rate fell to its lowest point since February of 2015, and it’s bothering consumers.

Fannie Mae has a Home Purchase Sentiment Index (HPSI), which measures consumers’ moods and views and expectations of the housing market, and when it fell by 2.5 points in March, it was the lowest reading in the past 18 months.

According to the HPSI report, 2/3’s of the components fell when consumers’ outlooks fell on the economy. The largest component of the net share that fell was the sector of consumers who believe now is a good time to sell a home. This group fell by 8 percentage points, which is currently at negative one percent.  Overall they believe now is a bad time to sell a home.

Another dropping sector of the report showed that consumers felt less confident about their job security, which fell from an all-time high. HPSI also reported that household income fell by four percentage points and fewer consumers claimed their income rose.

Doubt has been growing in the past three months about the direction of our economy, and it’s transitioning over into the housing market. People who believe the economy is headed the right way are standing farther across the alley than those who believe it is headed the wrong way more so than ever before.

The report saw dips in income growth perceptions, attitudes regarding home selling, and job confidence, all which created the lowest HPSO reading in the last year and a half. As a whole, the report showed mix signs despite the biggest declines in the most important areas. Here’s what Fannie Mae’s report concluded:

  • The net share of consumers say it’s a good time to buy a house fell by 2 points, leaving it at a 33%, with more claiming it is a bad time to buy a house.
  • The net share of consumers saying it’s a good time to sell fell by 8 points to a negative 1 percent.
  • The net share of consumers say home prices will go up rose 1 point to a whopping 34%, which breaks a downward trend for the last several months.
  • The net share of those who said mortgage interest rates will go down rose 5 points to a negative 45% for this month alone.
  • The net share of participants said they aren’t worried about losing their job fell 7 points to 68%.
  • The net share of participants said their household income is significantly higher than it was this time last year fell 4 points to 11%.

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