The Fannie Mae Home Purchase Sentiment Index (HPSI) recorded a 3.3-point uptick from February to March to 61.3, but still remained only slightly above its all-time low set from late last year. Year-over-year, the full index is down by 11.9 points.
Fannie Mae reported four of the HPSI’s six components increased month-over-month, most notably those associated with home-selling conditions and consumers’ sense of job security. However, 40% of consumers in March stated this is a bad time to sell a home, down from 44% in February, while 21% were concerned about losing their job in the next 12 months, down from 24% in the previous month. And the percentage of respondents who predicted mortgage rates will go down in the next 12 months decreased from 15% to 12%, while the percentage who expected mortgage rates to go up decreased from 55% to 51%.
“Despite the recent banking turbulence, the HPSI increased modestly in March, although it still remains near its historical low,” said Mark Palim, Fannie Mae’s vice president and deputy chief economist. “With the spring homebuying season now upon us, a large majority of consumers continue to believe that it’s a bad time to buy a home. Homeowners sharing this belief frequently cited ‘unfavorable mortgage rates’ as the primary reason for their pessimism, further corroborating the often-discussed disincentive – or ‘lock-in effect’ – that many mortgage holders who may be considering moving have toward giving up their lower rates. By contrast, surveyed renters once again indicated that high home prices are their primary concern for buying a home.”