Consumers' view of economy not translating to housing: Fannie Mae
Consumers' confidence about the U.S. economy is not correlating with their views on the current state of the housing market, Fannie Mae said.
Its Home Purchase Sentiment Index increased in August for the first time since May but that was due to the components that measure consumer attitudes on job security and household income, the net share of both reaching all-time high points for the survey. The index is now 88, compared with 86.5 in July, but unchanged from one year prior.
Of the four housing-specific measures, the net share of those that said now is a good time to buy a home fell 3 percentage points from July, to 21%. A similar decline was seen for consumers stating now is a good time to sell, which fell to 38%.
Meanwhile, the net share of consumers that expect rates to rise in the next 12 months remained unchanged at 52%. The net share of those who say home prices will increase in the next 12 months fell 1 percentage point to 38%. It is the first time the net share was below 40% for two consecutive months since December 2016.
"Consumers are attuned to the divergence between the slowing housing market and strong macro economy," Doug Duncan, senior vice president and chief economist at Fannie Mae, said in a press release. "Consumers were less optimistic this month about both home buying and home selling conditions, while perceptions of income growth and confidence about job security are at survey highs. After years of robust home price growth outpacing income growth, consumers face significant housing affordability challenges at the low end of the market."
There was a 15 percentage point increase in the HPSI component that measured the net share of those not concerned about losing their job in the next 12 months to 80%. That more than overcame an 11% decline in July from June.
There was a 1 percentage point increase in those who said their household income was significantly higher than it was 12 months prior, to 22%.