COVID-19 Pushes Consumer Confidence in Housing to Lowest Level Since November 2011

WASHINGTON, DC – After falling 11.7 points last month, the Fannie Mae Home Purchase Sentiment Index® (HPSI) decreased an additional 17.8 points in April to 63.0, its lowest reading since November 2011. Five of the six HPSI components decreased month over month, as consumers reported a markedly more pessimistic view of homebuying and home selling conditions. Moreover, on net, more consumers reported that their household income is significantly lower today than it was 12 months ago. Year over year, the HPSI is down 25.3 points.

“The HPSI experienced another unprecedented decline in April, falling to its lowest level since November 2011,” said Doug Duncan, Senior Vice President and Chief Economist. “The 17.8-point decrease reflected consumers’ deepening concerns about both their incomes and the housing market. Attitudes about whether it’s a good time to sell a home fell most sharply, dropping an additional 23 points this month. Individuals’ heightened uncertainty about job security, as registered in the survey over the last two months, is likely weighing on prospective homebuyers, who may be more wary of the substantial, long-term financial commitment of a mortgage. On average, consumers expect home prices to fall 2 percent over the next 12 months, the lowest expected growth rate in survey history. While consumers did grow more pessimistic in April about whether it’s a good time to buy a home, low mortgage rates remain a driver of purchase optimism. We expect that the much steeper decline in selling sentiment relative to buying sentiment will soften downward pressure on home prices.”