WASHINGTON—Consumers expectations have hit a new high when it comes to expectations for favorable mortgage rates over the next year, according to the July Home Purchase Sentiment Index (HPSI) from Fannie Mae. The consumer survey also found two-thirds of homebuyers in 2018 shopped around for their mortgage lender, helping them find more favorable loan terms.
"Consumers appear to have shaken off a winter slump in sentiment amid strong income gains," said Fannie Mae Senior Vice President and Chief Economist Doug Duncan in response to the July HPSI results. "Therefore, sentiment is positioned to take advantage of any supply that comes to market, particularly in the affordable category. However, recent financial market events following when the survey data were collected could weigh on consumer views looking ahead."
Fannie Mae's new HPSI reached 93.7 in July as five of the six components increased from June. The biggest gain was among those who are confident about not losing their job. Compared to the same time last year, the HPSI revealed a 24 percentage point bump in the number of people who believe "mortgage rates will go down" over the next 12 months, NAFCU noted.
Shopping Around
Meanwhile, respondents to Fannie Mae's National Housing Survey said real estate agents and family and friends are the most influential sources of advice regarding lender selection. However, those who only sought one quote when considering mortgage lenders reported that it was "because they were more comfortable with that particular lender."
Among the one-third who only obtained one quote were significantly less likely to cite competitiveness of the quote as an influence on their decision than those who received multiple quotes. Those who received multiple quotes were also more likely to try to negotiate aspects of the loan, including interest rates, and were more successful in doing so.