February 2018 — Confidence in housing is breaking new records, soaring in January in the Fannie Mae Home Purchase Sentiment Index® (HPSI). The HPSI overall posted 89.5 in January, 3.7 percentage points higher than the month prior and 6.8 percentage points higher than the year prior.
The ascent can be attributed to homeowners recognizing sale value, says Doug Duncan, chief economist and senior vice president at Fannie Mae. Moreover, prices are rising steadily, and the belief that they will continue to do so is tracking up.
"HPSI rebounded from last month's dip to a new survey high in January, in large part due to the spike in consumers' net expectations that home prices will increase over the next year," Duncan says. "Results may continue to fluctuate over the coming months as consumers sort out the implications of the newly passed tax legislation on their household finances. Over the past year, continued home price growth has helped spur a sizable increase in the net share of consumers who say it's a good time to sell a home, but also a modest weakening in the net share who say it is a good time to buy."
In January, the share of homebuyers surveyed for the Index who believe now is a good time to buy rose three percentage points to 27 percent, while the share of sellers who believe now is a good time to sell rose four percentage points to 38 percent. The share of those who believe home prices will go up rose eight percentage points to 52 percent.
The HPSI is derived from Fannie Mae's National Housing Survey® (NHS).