Photo: Robert Clark
American consumer confidence about housing grew in April, after dipping slightly in March. According to newly released data from The Fannie Mae Home Purchase Sentiment Index (HPSI), American consumers felt more optimistic about both their job stability and that now was a favorable time to buy a home.
Last month, the HPSI rose 2.2 percentage points to 86.7, after falling nearly 4 points to 84.5 in March. April’s HPSI reading was up 3 points year-over-year.
Five of the six components that comprise the HPSI were up from the previous month, with only one component registered a decrease in consumer confidence, says Fannie Mae.
The net share of Americans who feel that now is a good time to buy a home rose 5 percentage points to 35 percent in April, reversing half of the 10 point decrease recorded in March.
Similarly, more Americans felt secure in their jobs last month. Confidence in job security rose 7 percentage points last month to 77 percent, following a drop in March. Job security is one of the key driving factors of the HPSI — when Americans feel more confident in their jobs, the consumer outlook skews more favorably.
The net share of Americans that felt their income was “significantly” higher than a year ago climbed 2 percentage points from the previous month to 13 percent in April.
Meanwhile, the net share of Americans that felt home prices would rise increased by 1 percentage point from March to 45 percent in April. And, the number who felt mortgage rates would decrease over the next year rose 3 percentage points to -57 percent — up from last month’s all-time survey low of -60 percent, says Fannie Mae.
Consumer confidence about selling a home dropped by 5 percentage points to 26 percent in April, following March’s all-time survey high. This was the only component of the HPSI to register a decline.
Fannie Mae’s HPSI distills information about consumer sentiment from its National Housing Survey into a number. The HPSI is meant to reflect current and future views held by consumers through six component related questions that are related to their home purchase decision. Fannie Mae polls 1,000 Americans via the telephone for the HPSI.
“The Home Purchase Sentiment Index returned to its longer-term trend line after reclaiming ground lost last month. This is aligned with our market forecast of about 3 percent sales growth in 2017,” says Fannie Mae senior vice president and chief economist Doug Duncan.
Solid national home price gains are quelling consumer optimism, but that is countered by overall confidence in getting a mortgage — which reached a survey high in April, according to Duncan.
“On balance, housing continues on a gradual growth track,” he adds.
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