The share of renters who say now is a good time to purchase a home is at its highest level in five years, according to the latest reading from Fannie Mae’s Home Purchase Sentiment Index. Homeowners are also starting to feel more optimistic about selling.
Four of six components that the index measures increased in June over May. But the index, which measures American sentiment about the housing market, still remains down by 15 points over the last few months. In April, the index had reached a record low as the COVID-19 pandemic ignited in the U.S.
“A second month of improvement in June allowed the HPSI to regain some of the sharp losses in optimism observed in March and April,” says Doug Duncan, Fannie Mae’s chief economist.
The index suggests more favorable conditions for first-time home buyers, which is consistent with a recent rebound in home purchase activity and applications, Duncan adds.
Homeowners sense opportunity as well. “Homeowners seem to have taken note of the resulting lack of housing supply, with an increased share saying it’s a good time to sell a home,” Duncan says. “However, this activity may cool again in the coming months, depending on the extent to which it can be attributed to consumers having chosen to delay or to accelerate home buying plans due to the pandemic.”
Fannie Mae surveyed about 1,000 Americans and found elevated concerns about job security. “We believe the continuing uncertainty regarding the coronavirus’ containment suggests an uneven and potentially volatile course toward economic recovery,” Duncan says.
Here are more results from June’s survey:
- A good time to buy: Sixty-one percent of Americans surveyed said now is a good time to buy a home, up from 52% in May.
- A good time to sell: Forty-one percent of respondents say it’s a good time to sell a home, rising from 32% in May.
- Home price expectations: Thirty-four percent of respondents expect home prices will go up over the next 12 months, up from 26% in May. Thirty-one percent of Americans believe home prices will stay the same and 25% believe they will go down over the next year.
- Job concerns: Twenty-six percent of respondents are concerned about losing their job in the next 12 months; 74% are feeling secure.
- Household income: Twenty-five percent of respondents say their household income is “significantly” higher than it was 12 months ago, up from 18% in May. Sixteen percent say their household income is significantly lower, and 58% say their household income is about the same.
- Mortgage rate expectations: Forty-two percent of consumers expect mortgage rates to stay near record lows. However, 32% expect rates to rise, up from 25% who believed they could rise in May, which could be creating some urgency among some buyers.