Home Purchase Sentiment Index increased in January but remained well below pre-pandemic high.

Subdued. That’s how Fannie Mae’s chief economist describes consumer sentiment toward the housing market, as recorded in the enterprise’s latest Home Purchase Sentiment Index (HPSI). While the index increased in January for the third-consecutive month, it remained well below its pre-pandemic high. Overall, the HPSI rose 0.6 points to 61.6, with three of the index’s six components — home-selling conditions, home price outlook, and household income — increasing month over month, Fannie Mae said. Only 17% of survey respondents said they believe it’s a good time to buy a home, most likely because of the ongoing affordability challenges posed by higher mortgage rates and home prices. “January’s HPSI results showed that consumer sentiment toward the housing market remains subdued by historical standards,” said Doug Duncan, Fannie Mae senior vice president and chief economist. Duncan said the latest survey data also indicates that the majority of consumers expect home prices to decrease or remain flat over the next year, which could be an incentive for some potential homebuyers to delay their purchase decision. The percentage of respondents who said it’s a good time to sell a home increased from 51% to 59%, while the percentage who said it’s a bad time to sell decreased from 42% to 39%. The net share of those who say it’s a good time to sell increased 11 percentage points month-over-month.

Source: National Mortgage Professional