Economic uncertainty pulls consumer housing confidence from peak
Consumer confidence in the housing market remains relatively strong, but economic uncertainty is testing its resiliency, according to Fannie Mae.
After hitting an all-time high in August, Fannie’s Home Purchase Sentiment Index (measuring consumer housing confidence) declined 2.3 percentage points to a reading of 91.5 in September. The decline can be attributed to an 8-percentage point drop in the share of those secure in not losing their job, and a decrease of 7 percentage points among those expecting home prices to grow.
The share of consumers anticipating a decline in mortgage rates also fell 6 percentage points. The decrease in three of six HPSI components was somewhat offset by increases in the “good time to sell” and “good time to buy” (a house) elements of Fannie’s survey.
"Consumer sentiment remains relatively strong overall, though uncertainty about the economy and individual financial circumstances appear to be weighing on housing market attitudes a bit more than a month ago," said Doug Duncan, Fannie Mae senior vice president and chief economist, in a press release.
"Views about the direction of the economy held relatively steady, and the share of respondents who say it’s a good time to buy or sell a home rose slightly. However, consumers who are pessimistic about current housing market conditions are more likely to cite unfavorable economic conditions than the prior month. Job confidence remains high but still well shy of its July reading. Despite some added uncertainty, the September HPSI indicates continued strength in housing market attitudes and is consistent with recent data on housing activity,” Duncan continued.
The only HPSI component to remain unchanged in September was the share of consumers reporting their household income is significantly higher than the past 12 months, which held steady at 21%.