National Housing Survey

Consumers Feeling Better About Housing Market Despite High Home Prices

HPSI Up Significantly from All-Time Low Recorded Two Years Ago

November 7, 2024

The Fannie Mae Home Purchase Sentiment Index® (HPSI) increased 0.7 points in October to 74.6, pushing the measure of consumer confidence to its highest level since February 2022 and significantly higher than the all-time low recorded two years ago. In October, the share of consumers who think it’s a good time to buy a home increased to 20%, while the share who think it’s a good time to sell a home declined to 64%. On net, consumers continue to expect home prices to rise and mortgage rates to fall, with the latter component hitting another survey high this month. The personal finance components also remained fairly flat month over month, with fewer consumers expressing job loss concerns and slightly more indicating that their household income fell year over year. The full index is up 9.7 points year over year.

“While we have seen significant improvement in overall housing sentiment over the past two years, consumers’ perception of homebuying conditions remains strained, with only 20% believing it a ‘good time’ to buy a home, primarily due to high home prices,” said Mark Palim, Fannie Mae Senior Vice President and Chief Economist. “In fact, the share citing mortgage rates as the primary driver of their homebuying pessimism declined again this month; however, since the fielding of the survey primarily in the first half of October, mortgage rates moved sharply higher, which may serve to suppress some of the recently observed rate optimism. One effect of the prolonged period of relatively high home prices of the past four years is that we are seeing a slowly growing preference to rent rather than buy on consumers’ next move. With rent growth expected to remain modest in 2025, more consumers may be seeking – and finding – attractive deals in the rental market as they continue saving toward a future home purchase.”