Fannie Mae‘s Housing Purchase Sentiment Index increased to 77.7 in January 2021, a 3.7 point increase from December 2020. This is especially true for sellers as the home-selling conditions component increases 16%.

“The HPSI experienced a modest uptick in January, reversing much of December’s decline,” said Doug Duncan, Fannie Mae senior vice president and chief economist. “Interestingly, lower-income and renter groups were more optimistic this past month across nearly all of the sentiment index’s components. We will pay close attention to see if this newfound optimism develops into a trend, which could indicate either that some demographics who have been more negatively impacted by the pandemic may be starting to feel the economic recovery or that this is a response to the additional stimulus enacted in December.”

“Overall, the index’s monthly increase was driven largely by a substantial jump in the share of consumers reporting that it’s a good time to sell a home, with many citing favorable mortgage rates, high home prices, and low housing inventory as their primary rationale. Among owners and higher income groups, however, the other five components of the index remained relatively flat or slightly negative, suggesting to us that some consumers are waiting to gauge the effectiveness of any new fiscal policies and vaccination distribution programs on both housing and the larger economy.”

The number of respondents who believe it is a good time to buy a home remained at 52% and the number of folks who said it is a bad time to purchase a home dipped from 39% to 37%, according to Fannie’s HPSI. The largest increase was among those who said it was a good time to sell a home at 57%, compared to 50% in Fannie’s previous HPSI. Additionally, thhe percentage of folks who believe it is a bad time to sell a home decreased from 42% to 33%.

Meanwhile the overall sentiment on house price expectations remained fairly stagnant, with 41% saying home prices will go up in the next 12 months and 17% of respondents stating that home prices will decrease in the next year.

“The percentage of respondents who say mortgage rates will go down in the next 12 months increased from 8% to 9%, while the percentage who expect mortgage rates to go up increased from 43% to 45%,” according to the report.

Meanwhile, the percentage of respondents who said mortgage rates will stay the same decreased from 39% to 37%.

Click here to read more from Fannie Mae’s HPSI.

Navi Persaud

https://nationalmortgageprofessional.com/news/76359/housing-sentiment-builds-conditions-favor-sellers

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