Renter optimism raises housing market confidence
Consumer confidence in the housing market rose 0.3 percentage points in September, with renters becoming particularly optimistic, according to Fannie Mae's Home Purchase Sentiment Index.
At 88.3, September's HPSI now matches the all-time high set in June.
Three components contributed to this rise, with the "good time to buy" sentiment growing the most. But, less Americans believe mortgage rates will go down, as the net share expecting a rate decrease fell 2 percentage points.
The net share of consumers claiming it's a good time to buy rose 10 percentage points to 28% from August to September, straying from the decreasing trend of the past two months. Renter respondents are responsible for a significant increase in the "good time to buy" component.
The net share reporting it's a good time to sell rose 0.2 percentage points month-over-month, and 23 percentage points year-over-year to 38%, falling just below the survey high of 39%.
"Perceptions of easing inventory helped boost the net share saying that now is a good time to buy, which is consistent with less bullish home price appreciation sentiment during the month. Overall, we believe that the devastating impacts of the hurricanes will likely weigh on home sales in coming months, posing downside risks for our forecast, which already calls for only a modest gain in home sales this year," Doug Duncan, Fannie Mae senior vice president and chief economist, said in a press release.
Fewer consumers believe home prices will rise, as the net share of Americans expecting home price appreciation decreased by 8 percentage points to 40%, breaking the upward trend seen earlier in the quarter.