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National Housing Survey

Housing Sentiment Finishes 2024 Higher Despite December Dip

Mortgage Rate Optimism Primary Driver of Year-over-Year Improvement

January 7, 2025

The Fannie Mae Home Purchase Sentiment Index® (HPSI) decreased 1.9 points in December to 73.1 but remained substantially higher than year-ago levels due in part to ongoing mortgage rate optimism. A plurality of consumers continues to expect mortgage rates to decline over the next 12 months; while December’s 42% share was lower than last month’s 45%, it remains meaningfully improved compared to last December’s 31%. Likewise, the shares expressing optimism toward homebuying and home-selling conditions, respectively, declined slightly month over month, but both components remain up year over year. Overall, the HPSI is up 5.9 points compared to this time last year.

"Even though the HPSI fell to end the year, consumer sentiment toward the housing market finished 2024 substantially above year-ago levels, attributable in part to respondents’ ongoing expectations that mortgage rates will decline," said Mark Palim, Fannie Mae Senior Vice President and Chief Economist. "However, just over one-in-five consumers believes it is a ‘good time’ to buy a home – although that share has risen over the last year, too, after reaching an all-time low of 14% in Q4 2023. While respondents remain discouraged by the pandemic-era run-up in home prices and mortgage rates, the upward trend in homebuying sentiment in 2024 may reflect a slow acclimatization to the generally less-affordable market conditions."

Palim continued: "As noted in our recently published predictions-for-2025 forecast commentary, we expect a modest decline in mortgage rates, decelerating home price growth, and higher wage growth to improve the relative affordability of purchasing a home in the new year, though consumers' experiences will likely differ depending on where they live. As such, we think home purchase opportunities will still require market savviness by would-be homebuyers in what is expected to remain, broadly speaking, a highly competitive housing market."

On the right rail of this webpage, you will find a news release with highlights from the HPSI and National Housing Survey results, the latest Data Release highlighting the consumer attitudinal indicators, month-over-month key indicator data, an overview and white paper about the HPSI, technical notes providing in-depth information about the National Housing Survey methodology, the questionnaire used for the survey, and a comparative assessment of Fannie Mae’s National Housing Survey and other consumer surveys.

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Opinions, analyses, estimates, forecasts, beliefs, and other views of Fannie Mae's Economic & Strategic Research (ESR) Group or survey respondents included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the ESR Group bases its opinions, analyses, estimates, forecasts, beliefs, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, beliefs, and other views published by the ESR Group represent the views of that group or survey respondents as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.

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