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by G. Steven Bray
Industry reporters focused on the negative in the latest Fannie Mae housing survey. The headline Home Purchase Sentiment Index (HPSI) dropped about 2% from Dec to a reading of 81.5. But if you analyze the survey data, I don’t think the results are as dire as the headlines would have us believe.
The most significant negative I saw in the report is the year-long decline in the share of folks who think now is a good time to buy a home. I suspect that’s a reflection of the so-called affordability crisis. Whether a crisis actually exists, the media is beating it into people’s heads that housing is becoming unaffordable.
On the flip side, the share of folks who think now is a good time to sell is trending higher. This could lead to more inventory hitting the market for the spring selling season.
If concern about personal finances was the factor driving the decline in folks saying it’s a good time to buy, it’s not showing up in the survey results. The share that expects their personal financial situation to improve has been rising for the last 6m, and job security has remained steady within the survey’s margin of error during the same period. However, while folks don’t express concern about their personal situation, the right track-wrong track survey of the economy continues to grow increasingly negative.
I noticed several other positive nuggets in the report:
– A steadily increasing share of folks expects mortgage rates to increase in the next year. That may create a sense of urgency among potential homebuyers.
– Respondents expect rental rates to rise almost twice as fast as home prices. Got any renters sitting on the fence?
– And, finally, the respondents are becoming increasing positive about the ease of qualifying for a mortgage.
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. You’ll find a link to the survey results at the end of my blog.
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