WASHINGTON—Fannie Mae's Home Purchase Sentiment Index (HPSI) reached an all-time survey high in January, rising 3.7 points to 89.5. The enterprise's national housing survey revealed five of the index's six components saw increases during the month after a December dip.
The previous HPSI high of 88.3 was reached in September.
Although consumers are indicating positive perceptions about the housing market, NAFCU Research Assistant Yun Cohen said home prices are likely to limit growth.
"The lack of affordable inventory has been the biggest constraint to home sales," Cohen said. "While supply is expected to increase in the higher-end of the market in 2018, the shortage of entry-level homes is expected to persist."
The share of Americans who believe "now is a good time to buy a home" increased three percentage points from December, and those who believe "now is a good time to sell" increased four percentage points – up 23 percentage points year over year. Additionally, the net share of Americans who expect home prices to increase in the next 12 months rose eight percentage points in January, Cohen said.
The survey also found that the share of Americans who are not concerned about losing their jobs rose by five percentage points to 73%. Wage growth remained unchanged from December as 16% of respondents said their household incomes are significantly higher than a year ago.
Looking ahead, Fannie Mae expects fluctuating results "as consumers sort out the implications of the newly passed tax legislation on their household finances." It also anticipates home prices to continue to increase, leading more Americans to believe it's a good time to sell rather than buy, Cohen said.