Americans are more upbeat about the idea of selling, particularly as the vaccine rollout continues and latest round of stimulus checks are distributed. That could come as hopeful news as many markets face severe housing shortages and buyers are increasingly being left with few choices of homes for sale.
Fannie Mae’s Home Purchase Sentiment Index rose by 5.2 points in March to a reading of 81.7. The components on the index that increased the most last month related to home selling and buying, household income, and home prices.
“The significant increase in the HPSI in March reflects consumer optimism toward the housing market and larger economy as vaccinations continue to roll out, a third round of stimulus checks was distributed, and this spring home buying season began—perhaps with even more intensity this year, since 2020’s spring homebuying season was limited by virus-related lockdowns,” says Doug Duncan, Fannie Mae’s senior vice president and chief economist.
The measure over home-selling sentiment moved higher across most consumer segments and reached nearly pre-pandemic levels, Duncan notes. That is “generally indicative of a strong seller’s market,” he notes. “Consumers once again cited high home prices and tight inventory as primary reasons why it’s a good time to sell.”
More Americans also reported it’s a “good time to buy” in the March survey compared to February, likely still being drawn to historically low mortgage rates despite recent upticks. However, that measure on home-buying sentiment still lags behind pre-pandemic levels. The home-buying experience is proving difficult due to rapidly rising home prices and a lack of housing supply, Duncan adds.
Here’s a closer look at indicators from March’s Fannie Mae’s Home Purchase Sentiment Index, reflecting responses from nearly 1,000 consumers over the housing market:
- 61% of consumers said it’s a good time to sell, up from 55% in February.
- 53% of consumers said it’s a good time to buy a home, up from 48% in February.
- 50% of Americans surveyed believe home prices will go up over the next 12 months, up from 47% the month prior.
- 54% of consumers expect mortgage rates to increase over the next year, up from 47% a month earlier.
- 82% of Americans say they are not concerned about losing their job over the next 12 months, unchanged from February.
- 25% of respondents said their household income is significantly higher than it was 12 months ago, up from 17% in February.
Source: “Home Purchase Sentiment Index,” Fannie Mae (April 7, 2021)
