The Fannie Mae Home Purchase Sentiment Index (HPSI) declined for the first time in four months, dropping 0.9 points to 71.9 in March. This dip marks the first decrease since November 2023 and is primarily attributed to increased pessimism about future mortgage rates.
Thirty-four per cent (34%) of consumers now believe rates will rise in the next year, up from 32% last month. Despite growing pessimism about rates, both homebuying and home-selling sentiment saw slight gains in March. However, affordability concerns continue to dampen the overall belief that it is a “good time to buy,” with only 21% of consumers agreeing with that sentiment.
“The HPSI remained relatively flat in March, but we’re seeing signs that consumers may be adjusting their expectations for the housing market to better accommodate the higher mortgage rate and home price environment,” said Doug Duncan, Fannie Mae’s senior vice president and chief economist. “Both our ‘good time to buy’ and ‘good time to sell’ measures continued their slow upward drift this month. However, consumers took a slightly more pessimistic view on the likely direction of mortgage rates, likely reflecting the fact that actual mortgage rates have moved upward since the start of the year.
Source: mpamag.com