Fannie Mae Confirms Housing Confidence

Fannie Mae reported on their Home Purchase Sentiment Index® (HPSI) for June and found that it had rose 9.0 points in June to 76.5. This is the second month in a row that the index has improved and was thanks in large part to renter sentiment. Of respondents, the share of renters who say it is a good time to buy a home is at its highest level in five years. I suspect that the COVID-19 stay-at-home guidelines have motivated many buyers to want to shelter in their own home versus someone else’s property that they’re renting. The continued low mortgage rates add a level of peace-of-mind to excited buyers searching for their first home.

However, just as stay-at-home orders have motivated buyers to buy, the same situational influences appears to be affecting sellers in the opposite way and many want to stay put and keep their homes off the market. As an example, the percentage of buyers that felt it is a good time to buy hit a low for the year in April, with only 48% feeling it was a “good time” to buy. That has now rebounded up to a strong majority of buyers now feeling it is a good time to buy, at 61% of respondents. Conversely, seller sentiment also hit a low in April in regards to whether it was a “good time” to sell. Only 29% of respondents at the time felt that it was a good time to sell. Two months later and that percentage has improved to now 41% feeling it is a good time to sell. But the take away from June’s numbers is that while 61% of buyers want to buy, 59% of sellers still feel it is a bad time to sell.

In short, Fannie Mae’s surveys continue to confirm what we’re seeing here locally in our own market. Buyer activity is robust, while seller activity is limited. Competition for available homes is tight, and home values remain steady. Properly priced homes continue to receive offers in short order. Will home prices drop due to COVID-19 influences? Current data says no. I’ll continue to monitor and share information as it becomes available.