Confidence in housing u-turned in February in the Fannie Mae Home Purchase Sentiment Index® (HPSI), with the HPSI overall posting 85.8, 3.7 percentage points lower than the month prior and 2.5 percentage points lower than the year prior.
The backtrack was caused by converging influences, says Doug Duncan, chief economist and senior vice president at Fannie Mae.
“Volatility in consumer housing sentiment continued into February, with the new tax law beginning to impact respondents’ take-home pay and the stock market creating negative headlines due to early-month turbulence,” Duncan says. “Additionally, consumers’ expectations for higher mortgage rates suggest that consumers expect the Fed to hike rates a few more times in 2018. We will continue to track how consumer housing attitudes trend in the coming months as these various market forces play out.”
In February, the share of homebuyers surveyed for the Index who believe now is a good time to buy fell five percentage points to 22 percent, while the share of sellers who believe now is a good time to sell fell two percentage points to 36 percent. The share of those who believe home prices will go up fell seven percentage points to 45 percent.
The HPSI is derived from Fannie Mae’s National Housing Survey® (NHS).