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by G. Steven Bray
Fannie Mae’s Home Purchase Sentiment Index recovered in Apr from its recent swoon to its second highest level in survey history. The index is 3 points higher than last Apr and is similar to the level reached during last year’s spring buying season.
The most interesting results of the survey are the 5-point rise in the net share who thinks now is a good time to buy a home and the 5-point decline in the net share who think now is a good time to sell. I don’t generally put much stock in one month’s data, but the size of the change is a bit alarming and could suggest that home inventory problems will not end soon. However, averaging the data over several months shows that the net share saying “good time to buy” has remained somewhat constant while the net share saying “good time to sell” has been slowly rising. It will be interesting to see if the numbers reverse next month.
One positive conclusion from the survey is that Americans continue to feel better about their financial situations. The net share who feel confident about their jobs jumped 7 points, and the net share reporting their income has increased significantly in the last year rose 2 points. With respect to the economy, the right track/wrong track indicator remains positive with a net 7% saying the economy is on the right track.
I found two other data points interesting. The difference between the expected rise in rental prices and expected rise in home prices has narrowed this year. Last year, respondents predicted rents would rise by 4% while home prices would rise by only 2%. They now expect home prices to rise by 3%, which might create some sense of urgency to act before buying a home becomes unaffordable.
Finally, the net share who think it’s easy to get a mortgage today continues to rise, suggesting consumers have less apprehension about the mortgage process.
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.