Confidence in the housing market declines

The Scotsman Guide - Victor Whitman - 07 November 2016

Consumer confidence in the housing market fell in October, although more people thought it was a good time to buy and sell a home compared to September, Fannie Mae reported.

Fannie’s Home Purchase Sentiment Index (HPSI) fell in October by 1.1 percentage points to 81.7. That was also down 1.5 points for the same month a year earlier.

Each month, Fannie surveys 1,000 Americans via telephone to gauge consumer attitudes about the market.

In October, people generally showed less confidence in their income and job stability, and also believed mortgage rates will rise. Fewer people also thought home prices will rise next year. The percentage share of people who believed it was a good time to buy and sell a home increased. Generally speaking, though, people think it is a bad time to buy a home.

“The HPSI fell in October for the third straight month from its record high in July, reaching the lowest level since March,” said Fannie’s Chief Economist Doug Duncan.

“Recent erosion in sentiment likely reflects, in part, enhanced uncertainty facing consumers today,” Duncan continued.

Consumer attitudes about their incomes fell to their lowest level since early 2013, and were one major factor in the overall decline in the index. This component tends to be volatile, however, and dropped despite the trend of rising incomes, Duncan noted.