Home buying sentiment rises in August amid hot housing market
The Home Purchase Sentiment Index rose to 77.5 in August from July's dip to 74.2. However, the number was a far cry from the survey's peak of 93.8 the year prior, thanks to looming uncertainties in the present.
Positive consumer attitudes toward buying conditions dwarfed negative feelings by 24 percentage points. The percentage of good-time-to-buyers jumped 6 points month-to-month and 1 percentage point from a year ago. The group who felt it was a bad time to buy shrunk by 3 percentage points month-over-month while increasing 2 percentage points year-over-year.
Selling sentiment had a net positive score of 4 percentage points in August, a 7-point improvement from July but a 36-point drop from August 2019. Optimism for sellers rose 3 percentage points month-over-month to 48%, but lags the 65% share year-over-year.
"The HPSI's recovery was driven by near-record low mortgage rates that helped restore much of consumers' positivity on whether it is a good time to buy a home, while also improving the good-time-to-sell sentiment," Doug Duncan, senior vice president and chief economist at Fannie Mae, said in a press release. "The August survey was conducted as consumers continue to face uncertainty regarding schools' and businesses' reopening plans and as the CARES Act $600-per-week income supplement expired."
While worries over employment in the next 12 months remained inflated from year-ago feelings, the sentiment is becoming more optimistic. The net faction of consumers not concerned about job loss grew by 3 percentage points from July, while sitting 21 percentage points below August 2019. Relatedly, the net share of households reporting a significantly higher income from the past 12 months jumped to 9% from 6% in July but hangs back from August 2019's 21%.
Home price outlook was the only component of the HPSI to decline in the short term. A 7 percentage point net share of consumers think home prices will go up in the next 12 months, down 5 points from July and 29 points from the year earlier.