Housing Confidence Dips Slightly, Remains Near Survey High on Improved Mortgage Rate Expectations

WASHINGTON, DC – The Fannie Mae (FNMA/OTCQB) Home Purchase Sentiment Index® (HPSI) decreased 0.5 points in June to 91.5 after nearing its survey high last month. An 8-percentage point increase in the net “Mortgage Rates Will Go Down” component was more than offset by the index’s other five components, all of which were either negative or flat in June, highlighted by “Good Time to Buy,” which fell 4 percentage points this month.

“Growing expectations that mortgage rates will remain steady suggest improved stability for housing affordability and helped keep the HPSI relatively flat this month, despite modest declines in other components,” said Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae. “Regional variations in housing optimism appear to be tied to a divergence in housing affordability; for example, home purchase sentiment is higher in the Midwest and South than in the West and, to a lesser extent, the Northeast, where the lack of entry-level inventory and the resultant strong price appreciation has had a more profound impact on affordability. With fewer consumers expecting rates to jump back up – thereby creating less urgency to buy now – we expect housing market activity to remain stable.”