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by G. Steven Bray
The Fannie Mae Home Purchase Sentiment Index dipped again in Sep, moving further away from the high it hit in Jul. Fannie says the drop indicates increasingly cautious consumers. However, some of the caution may be misplaced.
Of the 6 index components, the one that decreased the most was the net share of consumers who expect mortgage rates to go up as opposed to go down. 49% said rates will rise whereas only 5% think they’ll fall. As I’ve been reporting in my weekly rate updates on Star Bits, I expect rates will stay within the same pretty narrow range over the coming year.
More disconcerting was the drop in the share of consumers who think now is a good time to buy. The net share – the difference between those who think it’s a good time to buy and those who don’t – dropped 5 points to the lowest level in the survey’s history.
Some of the consumer caution may be reflected in the job concern component. An increasing share is concerned about losing their jobs in the next year. However, that is balanced by a higher percentage who report their income is significantly higher than it was last year.
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, and you’ll find a link to the survey results at the end of my blog.