Fannie Mae Home Purchase Sentiment Index rises for 1st time in 9 months.

The Fannie Mae Home Purchase Sentiment Index (HPSI) increased 0.6 points in November to 57.3, its first increase in nine months, the government-sponsored enterprise said Wednesday. The index set an all-time low in October and remains significantly lower than its level at this time last year. Year over year, the full HPSI index is down 17.4 points, Fannie Mae said. Four of the index’s six components increased modestly month over month, including those associated with the conditions for buying and selling a home, both of which also remain well below year-ago levels. Higher mortgage rates continue to worsen affordability, and 62% of respondents expect mortgage rates to climb even higher over the next year, compared to only 10% who expect rates to decline. “Both consumer homebuying and home-selling sentiment are significantly lower than they were last year, which, in our view, is unsurprising considering mortgage rates have more than doubled and home prices remain elevated,” said Doug Duncan, Fannie Mae senior vice president and chief economist. “Following eight months of consecutive declines, the HPSI did tick up slightly in November, but is essentially unchanged since hitting its all-time low last month.” Duncan said that, with consumers continuing to expect mortgage rates to rise but home prices to decline, it has created “a situation that we believe will contribute to a further slowing of home sales in the coming months, as both homebuyers and home-sellers have reason for apprehension.” 

Source: National Mortgage Professional