Key Highlights
- Fannie Mae’s Home Purchase Sentiment Index (HPSI) saw +7% uptick in January 2021
- HPSI increased 3.7 points to 77.7
Fannie Mae’s Home Purchase Sentiment Index (HPSI) Indicated Rising Confidence in Housing Market in January
After two straight months of declines, the Fannie MaeHome Purchase Sentiment Index (HPSI) rose 3.7 points to 77.7 points overall in January 2021.
Increasing consumer confidence in buying and/or selling a home is great news, however, not great enough. Fannie’s HPSI has failed to recover the 15.3 points y/y it lost in pre-pandemic consumer confidence levels.
Slight Chasm in Confidence Levels Among Lower and Higher Income Groups
According to Doug Duncan, chief economist with Fannie Mae, lower income borrowers and renters are beginning to feel some positive effects of the economic recovery. Recent stimulus and fiscal policies are likely causing that optimism.
Confidence levels among mid- and higher-income groups were relatively flat in January. It’s more than likely these income groups were waiting to gauge the effectiveness of stimulus/fiscal policies and vaccination distribution programs before weighing in their confidence levels.
Consumer Confidence Levels Buoyed by Sellers in January
Prospective home sellers have been waiting on the sidelines of the housing market for quite a while now. Finally, in December, those prospective sellers saw the results they’ve been waiting for…increasing home prices and sustained home sales into the new year.
The percentage of respondents to Fannie’sHPSI who said it was a good time to sell in January increased to 57%, up from December’s response of 50%.
Home buying sentiment remained flat at 52% in January however, mortgage applications jumped +8.15% from the week ending January 29, according to the Mortgage Bankers Association.
Thanks to Fannie Mae, the Mortgage Bankers Association and HousingWire.
