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by G. Steven Bray
Based on Fannie Mae’s Home Purchase Sentiment Index (HPSI), it looks like consumers think we’re in a seller’s market. (I’m sure that comes as a big surprise to you.) For only the second time in the history of the index, the net share of those saying it’s a good time to sell exceeded the net share saying it’s a good time to buy. This happened because of an 8-point decline in the good time to buy index to a record low and a 6-point rise in the good time to sell index, which reached a record high.
I think the surprising result isn’t that we’re in a seller’s market but that it took so long for this reality to show up in the index. While the buy index is only slightly lower than it was last year and hasn’t varied a lot over the last 12 months, the sell index is 19 points higher than last year.
Changes in other components of the index were less dramatic. The net share who thinks mortgage rates will rise fell by five points, but the vast majority of respondents still believes rates will rise. The net share who thinks home prices will rise also fell by five points. This result seems anomalous as recent home price data all point to increasing and sometimes rapidly increasing home prices.
The survey also showed that consumers’ confidence in their personal financial situation continues to be strong with a net 71% not concerned about losing their jobs and a much larger share expecting household income to rise this year. The share who believes the economy is on the right track also ticked higher to 47%, which bests the wrong track share by seven points.
Fannie’s housing survey reflects the attitudes of 1000 consumers about the housing market and the economy. Fannie has conducted the survey each month since June 2010. Click here for a link to the survey results.