WASHINGTON—When it comes to prospects for buying or selling a home, the latest national survey from Fannie Mae finds Americans in something of duplex state of mind.
The Fannie Mae Home Purchase Sentiment Index (HPSI) decreased 0.9 points in March to 71.9, its first decline since November 2023, due primarily to increased pessimism about the direction of mortgage rates.
According to Fannie Mae, 34% of consumers now believe that mortgage rates will go up over the next 12 months, up from 32% last month and more than the 29% who believe rates will decline.
However, despite the increased pessimism toward rates, consumer perceptions of both homebuying and home-selling conditions actually ticked up slightly again in March, and both measures have now risen multiple months in a row.
Overall, though, the lack of housing affordability continues to weigh on consumers’ belief that it’s a “good time to buy” a home, with only 21% agreeing with that particular sentiment. The full index is up 10.6 points year over year, Fannie Mae reported.
‘Adjusted Expectations’
“The HPSI remained relatively flat in March, but we’re seeing signs that consumers may be adjusting their expectations for the housing market to better accommodate the higher mortgage rate and home price environment,” Doug Duncan, Fannie Mae senior vice president and chief economist, said in a statement. “Both our ‘good time to buy’ and ‘good time to sell’ measures continued their slow upward drift this month. However, consumers took a slightly more pessimistic view on the likely direction of mortgage rates, likely reflecting the fact that actual mortgage rates have moved upward since the start of the year.
‘Moving Past the Hurdle’
“With the historically low rates of the pandemic era now firmly behind us, some households appear to be moving past the hurdle of last year’s sharp jump in rates, an adjustment that we think could help further thaw the housing market,” continued Duncan. “We noted in our latest monthly forecast that we expect to see a gradual increase in home listings and sales transactions in the coming year. We believe this will be driven not only by those coming off the sidelines due to a rate-related recalibration, but also by households who may need to move for other life reasons."
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