Following three months of increases, Fannie Mae’s Home Purchase Sentiment Index (HPSI), a composite index designed to track the housing market and consumers’ desire to sell or buy a home, fell 1.7 points in November to 80.
Year-over-year, the HPSI is down 11.5 points.
Senior Vice President and Chief Economist Doug Duncan points to consumers’ wariness around the COVID-19 pandemic’s impact on buying and selling as reason for the sudden decline.
“This follows the HPSI’s recovery of slightly more than half of the loss experienced during the first few months of the pandemic,” he said. “Purchase confidence has recovered more for homeowners than for renters, in part because homeowners have been less likely than renters to have had their jobs and finances impacted by the pandemic.”
Duncan added that the gap between homeowner and renter subgroups hit a survey-high in August, and remains “elevated and well-above the survey average” in November.
Untying business growth from the housing market cycle
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The percentage of HPSI respondents who said it was a good time to buy a home fell 3% in November, from 60% to 57%. Those who said it was a good time to sell a home remained the same at 59%. The net share of Americans who say home prices will increase jumped 8 percentage points month-over-month.
As for mortgage rates, the net share of residents who believe rates will go down over the next 12 months decreased 14% month-over-month.
Concern for the job market has been understandably high in 2020; in October, the net share of residents who said they were concerned about losing their job was at 21%. That number increased to 24% in November.
The share of Americans who say the economy is on the right track actually rose 3 points to 42% from October. And, the net share of Americans who say their household income is “significantly higher” than it was 12 months ago increased 3 percentage points month-over-month according to the report.
Forty percent of HPSI respondents said they expect their financial situation to improve, and 41% think their financial situation will stay the same. Twenty-four percent of respondents said their change in household income is “significantly higher” in October than the past 12 months.
Justin Malonson is the Founder of LyfeLoop a 16+ year tech innovator, investigative media researcher and host of the Freedom Not Control Podcast live on Voice America. Justin is a highly sought-after tech entrepreneur, industry speaker and winner of the coveted Business Achievement Awards “Top Digital Marketer” award. With 16+ years of demanding experience, Justin has worked with over 3,000 businesses including amazing clients such as Blue Cross Blue Shield Association, Sotheby’s International Realty, Duke University, White House Black Market,Tiffin Motorhomes, Bass Pro Shops and Beazer Homes USA.