WASHINGTON–New year-end numbers show just how robust 2015 was for the economy.
Fannie Mae reported its Home Purchase Sentiment Index (HPSI) increased 2.4 points to 83.2 in December, rounding off the strongest year it has recorded to date. The share of consumers who reported that their income was significantly higher than it was 12 months ago increased nine percentage points on net in December 2015, while those who were unconcerned about losing their job rose three percentage points on net. The HPSI found the number of consumers who believe now is a good time to sell a home climbed four percentage points on net, although the share who believe now is a good time to buy remained flat in December.
“Consumers ended the year on an improved note with regard to their income, job security, and overall economic outlook,” said Doug Duncan, SVP-chief economist with Fannie Mae. “This more positive consumer sentiment brought the HPSI up a few points, moving the index up for all of 2015. Brightening economic prospects, if sustained, should stimulate demand for homeownership. However, continuing upward pressure on rental prices and constrained housing supply, particularly for starter homes, may mean prospective first-time homebuyers could face affordability constraints.”
Among the findings in Fannie Mae’s HPSI:
- Four of the six HPSI components increased in December: Household Income, Good Time to Sell, Job Security, and Home Prices. Mortgage Rate net expectations fell by four points, while the net share of respondents who said it is a Good Time to Buy remained at 35%. Overall, Fannie Mae said the HPSI is up 1.9 points since the same time one year earlier.
- The net share of respondents who say that it is a good time to buy a house remained flat at 35%.
- The net percentage of respondents who say it is a good time to sell a house rose after falling for two months in a row – rising four percentage points to 8% in December.
- The net share of respondents who say that home prices will go up rose two percentage points to 40%.
- The net share of those who say mortgage interest rates will go down continued to decrease, dropping four percentage points to negative 52%.
- The net share of respondents who say they are not concerned with losing their job rose three percentage points to 72%; 85% of respondents say they are not concerned about losing their job, tying an all-time survey high.
- The net share of respondents who say their household income is significantly higher than it was 12 months ago rose nine percentage points to 15%.