Do Your Customers Need a Confidence Boost?

July 11, 2016

More consumers are reporting mixed views toward housing and income growth, according to Fannie Mae’s latest Home Purchase Sentiment Index.

While the percentage of consumers who believe now is a good time to sell or buy is rising, fewer consumers are upbeat about the trajectory of home prices and stagnant wages are weighing on housing’s outlook, the index shows.

Here are some important figures from the survey:

  • The percentage of consumers who say now is a good time to sell a home rose 5 percentage points to a survey high of 18 percent in June.
  • The percentage of consumers who think now is a good time to buy increased 3 percentage points to 32 percent.
  • The share of consumers who say home prices will rise over the next 12 months plummeted 9 percentage points. 
  • The number of consumers who say their household income is significantly higher than it was a year ago dropped 10 percentage points.

Fewer consumers also reported a positive outlook on the state of the economy.

“The HPSI’s pullback in June from last month’s survey-high reading suggests a slight weakening in the 12-month outlook for housing activity,” says Doug Duncan, Fannie Mae’s chief economist. “Pending home sales have pulled back in the face of continued home price growth, and we’re seeing some softening in the higher priced components of the market. Growing pessimism about the overall direction of the economy gives us further pause as it now stands at the highest level we’ve seen in our National Housing Survey in the last two years.

 “Meaningful improvement in the housing market going forward will likely require consistent upward movement in consumers’ income growth perceptions, which have thus far been stagnant,” Duncan continues. “Also helpful would be an acceleration of supply accumulation of entry-level homes, which would moderate the growth of real home prices and increase affordability.”

Source: Fannie Mae