Fannie Mae Chief Economist Doug Duncan credited high prices and rising mortgage rates for weighing on potential homebuyers.
Fannie Mae’s Home Purchase Sentiment Index (HPSI) fell slightly in September from its measure in August. Contrary to this, five percent more Americans say it’s a good time to buy a home.
Behind the Numbers
These confusing statistics are not actually contradictory. The HPSI is established based on six metrics dealing with homeowner sentiment. Fannie Mae published a statement on the index measure in September. They attribute the dip to decreases in three of the six components. The three components include the mortgage rate and household income.
Fannie Mae Chief Economist Doug Duncan credited high prices and rising mortgage rates for weighing on potential homebuyers. But compared to last month, only one percent more homeowners expect home prices to rise again in October.
The index also indicated respondents had a more pessimistic outlook on job security. Compared to last year’s numbers, one percent fewer said they were confident about retaining their jobs. Three percent fewer reported a significantly higher household income.
The U.S. Bureau of Labor Statistics reports national unemployment is at a low rate of 3.7 percent and wage growth remains positive. But Realtor.com Chief Economist Danielle Hale believes that wage growth “pales in comparison to growing home prices.” He pointed to the fact that home prices rose another seven percent last month alone.
Duncan also noted consumers who believe now is a good time to buy overwhelmingly cite the overall market conditions.
Consumers also worry about future mortgage rate increases. September posted the second consecutive monthly increase in interest rates. September also had the highest rate for a 30-year fixed-rate mortgage since 2011.