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by G. Steven Bray
Fannie Mae’s Home Purchase Sentiment Index (HPSI) climbed to its highest level in July, rebounding from Jun. That could mean good news for the end of the summer homebuying season.
All six components of the index rose in Jul. Maybe the most encouraging result was the “good time to sell” component, which reached another survey high. That might portend a loosening of the very tight inventory situation in many areas.
Another encouraging result is the increase in the percentage who said they would buy if they move. Sixty-seven percent said they would buy while only 26% said they would rent, an all-time low for the survey.
Respondents’ concern about their personal financial situation rebounded in Jul. Only 16% expressed concern about losing their job in the next year, and 11% more think their income will rise than think it will fall. While these are positive numbers, the rebound simply returns them to their previous, flat trend.
I found two other interesting data points. Forty-one percent more people think home prices will rise than fall in the next year. That’s a huge turnaround from the spring. And the percentage who thinks mortgage rates will rise in the next year continued to fall, reaching a survey low.
However, Fannie economist Doug Duncan threw some cold water on the HPSI record high, noting that the increase only returns the index to its previous, slow upward trend. I would say that’s better than the alternative.
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 the survey results.